Erste Group revised an upward forecast for Romania‘s 2021 economic growth from 4.2% (in Q1) to 6.7%. The Austrian group expects that the growth rate will remain robust in Romania in 2022 at +4.5%, according to bne Intellinews.
Erste Group also revised upwards its forecast for all the Central and Eastern Europe (CEE) countries where it operates, a region the Austrian financial group expects to outperform as a whole the euro area’s expected 4.4% advance in 2021.
The causes of the resilience already demonstrated by the region, Erste Group explained that although quarantine measures have significantly affected services and trade, the production sector, which traditionally plays a key role in the CEE region has been much less affected overall.
Confidence in the region is also reflected in the evolution of its stock markets and in the first half of the year, the market capitalization of the main CEE indices increased by 17.6% as a weighted average.
The Erste Group’s analysts carried out an estimate of the Recovery and Resilience Facility’s impact on each country’s GDP, which is projected at between 1.2% GDP in 2026 (when the facility expires) in the Czech Republic and 2.9% in Romania.
The size of the disbursements under the facility differs significantly, with the biggest packages measured as a share of GDP being in Romania (13.4%) and Croatia (13%) and the lowest in the Czech Republic (3.2%).