Table of Contents
The report covers info as of October 27.
Romania's economy prepares for robust growth of above 3% this year and even more in 2016. But the fiscal slippage risks are rising as the government is endorsing measures with significant impact on budget. The EC and IMF expect the deficit to widen toward 3% of GDP next year and exceed this threshold in 2017 under current fiscal regime. The public debt is around 40% of GDP and the exposure to volatile external financing conditions is moderate.
Romania's macro-fiscal fundamentals are sound, and export growth has remained solid even in the context of weak external demand, the World Bank said in its economic outlook for the Europe and Central Asia region, Low Commodity Prices and Weak Currencies, released on October 26.
Romania's GDP will accelerate to 3.9% y/y in 2016, from 3.4% y/y in 2015, according to the International Monetary Fund's latest World Economic Outlook report, issued on October 6. The country's economic advance would thus be the highest among European economies in 2016, after being significantly above the average (1.9%) this year.
But the IMF also warned on fiscal slippage risks. Romania's adopted and intended policies will push the country's fiscal deficit close to 3% of GDP in 2016 and above that threshold in 2017, unless offsetting measures are identified or capital spending is again not fully carried out, the International Monetary Fund warned in the statement issued at the end of a staff visit in Romania.
oRomania's government survives no-confidence vote
oS&P affirms Romania's sovereign rating, issues moderate growth forecast;
oRomania wants flexible arrangement with IMF, no fiscal constraints; IMF warns Romania's fiscal deficit is "set to rise significantly"
oIMF expects Romania's GDP to accelerate to 3.9% y/y in 2016; medium-term growth seen at 3.3%
oRomania revises Q2 GDP growth to 3.4%, from 3.3%; GDP increased by 3.8% y/y in H1
oRomania's industrial output 6% up y/y in August
oConstruction work in Romania up 10.8% y/y in August
oRomania's retail sales up 9.6% y/y in August on VAT rate cut for food
oRomania's consumer prices 0.26% up m/m in September
oRomanian wages up 9.8% y/y in August - in new post-recession record advance
oGeneral government posts 0.9%-of-GDP surplus in Jan-Sep ; Romania's Fiscal Council warns of costly fiscal slippage in medium term
oRomania drafts second budget revision, keeps deficit target at 1.85% of GDP
oRomania's current absorption of EU funds up only 2.2pp q/q to 57% at end-Sep
oPublic debt-to-GDP ratio down 0.8pp to 37.5% at end-August under ESA
oRomania issues EUR2bn worth of 10-year, 20-year Eurobonds
oRomania keeps policy interest rate at 1.75% amid medium-term inflationary pressures
oGrowth of mortgage loans in Romania accelerate to 14.3% y/y at end-Sep
oLoan-to-deposit ratio down to 92.2% in Romania at end-September on rising deposits
oRomania's C/A deficit halves y/y to EUR585mn in Jan-Aug
oRomania's trade gap widens by 94% y/y in August
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