The IMF now estimates Romania’s economy will decline by 4.8% this year, compared to a 5% drop envisaged in April, and trusts it will recover rather robustly by 4.6% in 2021, compared to a 3.9% increase projected in April.
The Fund’s forecast is notably more optimistic than that of the World Bank, which expects a 5.7% contraction in 2020, followed by a 4.9% recovery in 2021, according to its latest forecast.
The IMF also improved its estimates on the current account (CA) deficit registered by Romania this year, to 5.3% of GDP compared to 5.5% seen in April. Next year, Romania’s CA gap will narrow to 4.5% of GDP, under the Fund’s scenario.
The new IMF estimates are also more optimistic about the evolution of the unemployment rate, which would still increase from 3.9% in 2019 to 7.9% in 2020 (10.1% estimated in April). However, the Fund expects unemployment to remain at the same level in 2021, and not drop to 6% as expected in April.
Globally, the IMF revised its projection to 4.4% economic contraction in 2020, less severe than the 4.9% under the previous WEO edition published in June.
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