The growth of the Romanian economy will slow down in the first half of this year, driven by subdued household consumption, investments and lower external demand, but the country's economy will later recover and grow by 2.8% over the whole year, according to a research report by OTP Bank.

After last year's growth of 4.8% was driven, especially in the fourth quarter, by the construction sector and a smaller-than-expected decline for agriculture, in 2023, the contribution of construction is expected to decline, while retail will remain stable, and agriculture and industry will mark slight increases.

The forecast for a return to stronger growth in the second half of the year is also based on the fact that inflation is on a downward path, towards 6.5% at the end of the year, following base effects and the weakening of supply-side pressures.

OTP believes that the interest rates will remain stable after the National Bank of Romania (BNR) has ended the monetary tightening cycle so that the refinancing rate could remain at the current level until the middle of the year.

iulian@romania-insider.com

(Photo source: OTP Bank)