Romania's Gross Domestic Product, or GDP, grew by 2% in real terms in 2023, according to preliminary data published by the National Institute of Statistics. In the fourth quarter, the economy contracted by 0.4% compared to the previous quarter and grew by 2.9% on an annual basis. 

The economy is slowing down compared to previous years – it grew by 5.7% in 2021, following the recovery from the pandemic (when it contracted by 3.7%), then by 4.1% in 2022. Excluding 2020, this is the smallest economic growth since 2013, according to Profit.ro.

Details of the economic growth in the fourth quarter will be published later by the National Institute of Statistics. 

The National Bank of Romania saw signs of an acceleration in the annual economic dynamics in the fourth quarter due to an increase in retail sales and the volume of services provided to the population in October and November last year. At the same time, industrial production moderated its contraction, and construction work grew at a double-digit rate as a result of infrastructure work. 

Analysts polled by Bloomberg were anticipating an acceleration in the annual GDP dynamics to 1.5% in the fourth quarter, compared to 1.1% in the third quarter. UniCredit Bank expected an even faster acceleration to 2.6%. The bank's forecast is for a growth of 1.4% in 2023, followed by 3% this year, and then a slowdown to 1.6% in 2025.

In turn, ING estimated an increase of 1.7% for 2023 after a return to an annual rate of 2.2% in the fourth quarter. For 2024, the Dutch bank sees a growth of 2.8%. Erste expected GDP growth of 1.2% in quarterly terms compared to Q3. For the entire last year, Erste's growth forecast was 2.1%, followed by an acceleration to 3.3% this year. 

The European Commission was anticipating a growth of 2.2% in 2023, followed by an acceleration to 3.1% in 2024 and 3.4% in 2025, according to the forecast from November.

radu@romania-insider.com

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