Romania’s economy will grow by 3.5% this year, as well as in 2023, followed by a stronger advance (4.5%) in 2024, according to the revised forecast of the Austrian think-tank wiiw (Vienna Institute for International Economic Studies).

The consumer price inflation is seen at 12% this year (average), to ease at 7% in 2023 and 4% in 2024.

The wiiw also has moderately optimistic projections for the country’s twin deficits.

The public deficit is seen as shrinking to 6.5% of GDP this year from 7.1% in 2021 (under ESA) and further dropping to 4% of GDP in 2024.

The current account deficit would remain at 7% of GDP this year to slightly narrow at 6% in 2024, under the scenario sketched by wiiw.

The war in Ukraine is clearly having negative effects on the economies of the 23 countries of Central, Eastern and Southeastern Europe (CESEE) reviewed by wiiw, but so far, the scale of the impact varies widely across the region, according to the think tank’s summer forecast.

Although growth will be considerably lower on aggregate than expected pre-invasion, most of the region will avoid an economic recession this year.

The 11 EU members of the CESEE region continue to be among the most resilient. Despite high inflation, the energy crisis, supply-chain problems and slowing dynamics in industry they should be able to grow on average by 3.3% this year. The main pillar of the economy is private consumption, while exports are weakening.

(Photo: Antonyesse/ Dreamstime)

andrei@romania-insider.com