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EBRD lowers forecasts of Romania's economic growth in 2019


The Romanian economy will grow by 3.2 percent this year, compared with a 3.6-percent forecast issued in November, indicate the latest forecasts released on Wednesday by the European Bank for Reconstruction and Development (EBRD).

For 2020, the EBRD expects another 3.2-percent expansion in Romania's Gross Domestic Product (GDP).

The EBRD's forecasts come after the European Commission on Tuesday downwardly revised to 3.3 percent its estimates of the real Romanian economy growth this year, from a January forecast of 3.8 percent. For 2020 next year, the EC expects a further decline in Romania's economy, with economic growth projected at 3.1 percent now, down from 3.6 percent in the January forecasts.

In its recently drafted 2019-2022 spring forecasts, Romania's Strategy and Forecast Board keeps its estimate of economic growth this year at 5.5 percent, with the nominal gross domestic product slightly upwardly revised to 1,031 billion lei, from 1,022 billion lei in the winter forecast. The growth forecasts for the next three years remained unchanged at 5.7 percent in 2020 and 5 percent in 2021 and 2022.

In the beginning of April this year, the International Monetary Fund (IMF) revised downwardly to 3.1 percent, from 3.4 percent, its estimates of the Romanian economic growth in 2019.

The IMF forecasts are more pessimistic than those of the World Bank, which has slightly improved its estimates of the developments in the Romanian economy in 2019, from 3.5 percent, as estimated in January, to 3.6 percent, and in 2020, from 3.1 percent to 3.3 percent.

The 2019 national budget is built on a Gross Domestic Product of 1,022 billion lei, up 5.5 percent from 2018, an average annual inflation of 2.8 percent and a budget deficit estimated at 2.55 percent of GDP (cash) and 2.57 percent of GDP (ESA).

The European Bank for Reconstruction and Development (EBRD) was set up in 1991 to invest in the former Communist bloc and help them transition to a market economy. In recent years, the EBRD has begun to shift its focus from the former Soviet bloc to North Africa and the Middle East.The EBRD is a leading institutional investor in Romania. So far, the bank has invested nearly 8 billion euros in the country in over 400 projects. In 2017 alone, it committed over 550 million euros in Romania. More than 500 million euros of this funding went to the private sector, the highest level in the last seven years.