The International Monetary Fund on Tuesday said that Romania’s economy will contract by 4.8% this year then rebound, growing by 4.6% in 2021.
In its last forecast in April, the IMF forecast Romania’s gross domestic product would shrink by 5% in 2020 and then recover to 3.9% growth in 2021.
Romania’s economy has been pummeled by the coronavirus pandemic which battered many sectors after the country was put under a two-month strict. A slow recovery of the manufacturing industry, a poor harvest and a prolonged drought also hurt economic performance.
„The global economy is climbing out from the depths to which it had plummeted during the Great Lockdown in April. But with the Covid-19 pandemic continuing to spread, many countries have slowed re-opening and some are reinstating partial lockdowns to protect susceptible populations,” the IMF said in its October 2020 World Economic Outlook report.
Romania’s current budget deficit is forecast to rise to 5.3% of GDP in 2020, from 4.6% the year before. The IMF sees its deficit is seen narrowing to 4.5% in 2021.
Consumer price inflation is forecast for 2.9% in 2020 and 2.5% in 2021.
Unemployment is projected to rise to 7.9% at the end of the year, double the jobless figure in. It should then decline to 6% in 2021.
Romania’s finance ministry in August estimated a 3.8% contraction of economic output in 2020, revising its previous forecast of a 1.9% drop, after some sectors performed worse than expected during the health crisis.
The World Bank said this month it expects Romania’s economic output to shrink by 5.7% this year, as a result of the pandemic, maintaining the forecast it made in June.
The World Bank expects Romania’s economy to recover in 2021 and expand by 4.9%.