Erste cuts Romania's 2022, 2023 GDP growth f'casts
BUCHAREST (Romania), November 21 (SeeNews) - Erste Group analysts said they are lowering their forecasts for Romania's gross domestic product (GDP) growth for this year and next to 4.7% and 2.1%, respectively.
"We downgraded our FY22 GDP growth estimate to 4.7% y/y, from 6.2% previously, though high frequency data suggests further downward revision to the 2022 GDP data series," Erste said in an e-mailed statement on Friday.
"Based on the new historical dataset for Romanian GDP and incorporating the new GDP growth forecast for the Eurozone for 2023, we revised our 2023 GDP growth projection for Romania to 2.1%, from 2.7% previously, with the better carry-over effect partially offsetting the lower external demand assumption."
Erste also revised its forecast for Romania's 2024 economic expansion to 4.2%, from 5.3% predicted previously.
In Erste's view, Romania's economy is facing a soft patch ahead and avoiding technical recession should require well-timed and significant state investments, for which plenty of EU funds are allocated, though bearing the risk of domestic administrative bottlenecks. "This is likely to make the difference between swiftly switching into lower gear or a sudden braking," Erste said.
"Our baseline scenario is based on ongoing fiscal consolidation in line with targets agreed with the EC and the implementation of structural reforms agreed under the recovery and Resilience Plan, which should boost potential growth, correct the external imbalances, improve social inclusion, avoid negative rating actions," Erste added.
Romania's economy grew 4% year-on-year in the third quarter of 2022, compared to 5.6% annual increase in the like quarter of 2021, according to most recent non-adjusted flash data from the statistical board. In the first nine months of 2022 Romania's GDP rose by an annual non-adjusted and seasonally-adjusted 4.3% year-on-year.
Romania's economic output will rise by an estimated 4.6% in 2022, finance ministry analysts said in October, improving their previous forecast for 3.5% growth.
In 2021, Romania's economic output increased by 5.9%, compared to a 3.9% contraction in 2020.
Earlier this month, the European Commission said that Romania’s economy is expected to expand by a real 5.8% in 2022, as compared to 3.9% growth rate projected in July, but lowered expectations for 2023 economic growth to 1.8% from previously estimated 2.9%.
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