Romania Economy to Grow Above Potential

Romania’s economy could rise above its potential in 2017 and 2018, the World Bank estimated in its most recent report on Regional Economy, Migration and Mobility in Europe and Central Asia. Romania Insider reported. “The GDP will probably grow by 5.5% this year because of the fiscal stimulation measures and the improvement of the European economy,” WB said. The current account deficit will grow to 3.1% this year from 2.4% in 2016. Inflation will also go up reflecting the excessive domestic demand and the fact that the effects of tax cuts have mitigated. The National Bank of Romania expects a gradual increase of inflation up to 2% at the end of 2017. The WB estimates a 4.1% GDP increase next year and 3.6% in 2019. The current account deficit could amount to 3.5% next year and 3.8% in 2019. The fiscal deficit and current account deficit are on the rise, and public debt dynamics have not stabilized, according to the World Bank. This makes Romania’s economy vulnerable to external shocks.