Local lender Garanti Bank, which is part of Turkish group Garanti, has revised up Romania’s GDP growth prognosis to 3% this year and 3.5% in 2016.

The bank’s new forecast is based on the fiscal relaxation measures from the new Fiscal Code. The VAT cut on food from 24% to 9% could generate an increase in consumption and economy. The incentives related to the tax reduction will be more visible next year, bringing an extra 0.7 percentage points to the GDP, according to the bank.

The annual increase of 4.3% of the GDP in the first quarter was above expectations and is reflected in several economic sectors such as industry, services, trade, transport and construction. The IT sector, which recorded the fastest growth in GDP last year, increased by 24% in the first three months of the year. The sector will remain one of the main engines of growth this year.

editor@romania-insider.com