Romania GDP to Slow

The growth rate of Romania’s gross domestic product will slow down to 3.9% this year, from unsustainable growth rates in the past couple of years, while political risks remain significant, UniCredit economists estimated in the last quarterly report, Business Review reported. In their prior report, released three months ago, the economists had estimated a GDP growth rate of 4.4% in 2018. “The Romanian economy is finally slowing from unsustainable growth rates in 2016-17. The slowdown is not surprising. A significant part of last year’s growth relied on supply-side shocks (a bumper harvest) and large fiscal and credit impulses that are already weakening,” the latest report said. The bank’s economists see rising risks of populist measures in Romania with impact on the economy. “Due to the busy election schedule, the mix of macroeconomic policies may worsen further, with wages and pension hikes crowding out other types of fiscal expenditure,” Unicredit economists said. According to the economists, Romania’s government will maintain the budget deficit below 3% of GDP in 2018.