Romania undergone the sharpest deterioration of its 2024 growth outlook among the set of countries covered by the European Bank for Reconstruction and Development (EBRD): -1.8 percentage points (pp) from 3.2% in May to 1.4% in September, according to the Bank's regional report published on September 26.

The 1.4% growth rate makes Romania one of the slowest economies in the EBRD region, ahead of only Tunisia and the more developed economies of Czechia, Estonia, and Latvia. 

For the whole region covered by the Bank, the economic growth this year is expected at a level twice as high as Romania's (2.8%).

A harsh correction was operated by the EBRD on the forecast for Romania's 2025 growth: from 3.4% to 2.6% – still inferior to the EBRD region's 3.5% average. Only the conflict-hit Ukraine and Lebanon, as well as Estonia and Latvia, were subject to revisions of comparable magnitude. 

On average, the Bank cut its forecast for the region down by only 0.2pp to 2.8%  for 2024 and by 0.1pp to 3.5% for 2025.

The report, entitled "Along the adjustment path," gives several reasons for the downward revisions. Economic activity has been slower than expected in Central Asia, where mining activities in Kazakhstan and Uzbekistan have stagnated. South-eastern European Union (EU) states have been impacted by spillovers from a weaker outlook in advanced Europe.

Meanwhile, economies in the southern and eastern Mediterranean (SEMED) region are feeling the effects of a severe drought and the ongoing conflict in Gaza and Lebanon.

iulian@romania-insider.com

(Photo source: Jerome Cid/Dreamstime.com)