Romania’s National Bank (BNR) expects a slowdown in the economy in the next period, as the economic growth decreased in the third quarter of 2016 and then resumed growth in the last three months.

Consumer demand and investments led to a faster economic growth in the last quarter of 2016, after the growth pace dropped from 6% in the second quarter to 4.4% in the third quarter.

The evolution in the last three months of the year will be followed by “a certain slowdown”, according to BNR. This will lead to a slower expansion of the positive output gap and the inflationary pressures in the short term. BNR believes that inflation will move into positive territory in the first quarter, after Romania ended 2016 with an annual inflation of -0.5%.

A lower economic growth would be bad news for the government, which based its governing program on a 5.5% GDP growth in 2017.

editor@romania-insider.com