Romania‘s gross domestic product (GDP) will grow by 2.5% in 2022, the European Bank for Reconstruction and Development (EBRD) said on Tuesday, revising downwards its March forecast of 2.8% growth, according to See News.
“This year’s GDP forecast is dependent on risks tilted to the downside and contingent on the evolution of the war in Ukraine and other supply pressures,” the EBRD said in the May edition of its Regional Economic Prospects report.
In 2023, lingering inflation pressures, fading pent-up demand and supply chain issues are expected to restrain growth to 3%, compared to 4.2% economic expansion forecast in March.
In 2021, Romania’s GDP rose by 5.9%.
“The government has adopted a range of measures to support vulnerable households and firms affected by the war. As such, the fiscal consolidation envisaged for this year could be constrained by these expenses and by weaker economic growth,” the EBRD noted.
The bank’s estimates for economic growth in 2022 and 2023 are more pessimistic than the Romanian government’s, which forecasts a 2.9% rise in economic output for 2022 and 4.4% growth for 2023.
“All forecasts for this year and next are vulnerable to major downside risks in the event that the scale of the war expands or the flow of exports of gas or other commodities from Russia is further restricted,” the EBRD noted.
The National Bank of Romania (BNR) has raised the policy rate to 3% by April 2022 and, facing a tightening of liquidity since the start of the war, has intervened in the secondary market for sovereign debt to calm debt markets, Agerpres reports.