Romania’s economy will grow by 3.5% this year, after contracting 5% in 2020, the World Bank said predicting a slower recovery due to the effects of the pandemic.
Last October, the World Bank estimated Romania’s economy would register a 4.9% growth in 2021 after shrinking 5.7% in 2020.
Recovery will be slow with 4.1% growth in 2022, according to the World Bank’s Global Economic Prospects published on Wednesday.
Still, Romania’s recovery rate is slightly above the regional average of 3.3% this year, the World Bank said referring to the Europe and Central Asia region.
The recovery rate hinges on the successful rollout of an effective Covid-19 vaccine in the first half of 2021 in the world’s biggest economies and in the second part of the year for emerging economies.
The report said that globally, economic output is expected to expand 4% in 2021 but remains well below pre-pandemic projections.
The pace of the recovery is forecast to vary considerably across different regions, with more pronounced weakness in countries with larger outbreaks or greater exposure to global spillovers through tourism and industrial commodity exports.
It also warned that a surge in infections and delays in vaccination could shrink this year’s economic recovery to just 1.6%.
“Economic activity in Europe and Central Asia is estimated to have contracted 2.9 % in 2020 in the wake of disruptions related to the Covid-19 pandemic,” which is expected to “erase at least five years of per capita income gains in about a fifth of the region’s economies and raise the poverty headcount,” the report said.
“The outlook remains highly uncertain, however, and growth could be weaker than envisioned if the pandemic takes longer than expected to fade, external financing conditions tighten, or geopolitical tensions escalate again.”