BT issues optimistic scenario for Romania’s economy

Romania’s economy will grow by 3.5% this year and by 4.5% on average in the coming two years, while the twin deficits would shrink considerably over the coming three years, according to the latest macroeconomic projection from the country’s largest financial group Banca Transilvania (BVB: TLV). The bank thus revised downward its forecast for this year’s economic growth from 5.1% envisaged under the latest scenario published on January 17, according to Romania-Insider.com.

Therefore, Banca Transilvania remains on the optimistic side, as long as other banks (such as BCR Erste Group Bank) expect growth rates rather close to 2% this year.

Romania’s largest financial group grounds its expectations on “an evolution supported by the continuation of the investment cycle, with an impact for the other components of the GDP,” according to Banca Transilvania’s research note, quoted by Ziarul Financiar.

“We have updated the forecasts for the dynamics of the Romanian economy in the short and medium-term by incorporating the latest global, European and domestic macro-financial developments, including the INS provisional estimates on performance in Q4 last year and the pandemic year 2021. According to the new forecasts, Romania’s economy could grow with annual dynamics of 3.5% in 2022, 4.4% in 2023 and 4.7% in 2024.”

The scenario also includes a significant reduction of the current account (CA) gap from 7.1% of GDP in 2021 to 5.5% of GDP this year and under 5% of GDP in 2023 to no more than 3.3% of GDP in 2024. The gap rose to 7.4% of GDP in the 12 months to January 2022.

BTRL remains optimistic in regard to the fiscal consolidation as well, envisaging a public deficit of 5.0% of GDP this year, 3% of GDP in 2023 and 2.5% of GDP (under ESA) of 2.5% of GDP in 2024.

Read more HERE

Comments

comments