Romania’s economy will grow by 2.5pct in 2023 and by 3pct in 2024, while the inflation rate will stand at 9.7pct this year and 5.5pct next year, according to the winter 2023 economic forecast, published by the European Commission on Monday, according to Agerpres.

Based on short-term indicators, Romania’s economy is expected to be resilient in the fourth quarter of 2022, considering the favourable developments in the services sector and confidence in the economy, and despite the continued decline in manufacturing.

For 2023, the negative impact of still high inflation, the tightening of financing conditions and the slowdown of other economies in the EU would lead to a lower advance of the real GDP in Romania, at 2.5pct.

The implementation of the National Recovery and Resilience Plan (PNNR) should contribute to strong investments, which would be the main engine of growth. Other European funds would also support the investments.

Private consumption, although negatively affected by high inflation, would increase, following the increase in the minimum wage, pensions and salaries in the public sector, as well as the extension of the energy price ceiling until 2025. Net exports would remain negative, against the backdrop of a strong currency and low demand on export markets.

A recovery to 3pct in economic growth is projected for 2024, amid easing inflationary pressures, lower interest rates and an improving external outlook.

In December, the harmonized index of consumer prices (HICP – indicator for determining inflation at the level of EU member states) slowed due to lower energy and food prices, so that the average rate in 2022 stood at 12pct.

Inflation is expected to decline in 2023-2024, but modestly, as inflationary pressures remain extremely high in core components such as services, non-energy industrial goods and processed food.

The harmonized index of consumer prices is expected to stand at 9.7pct in 2023, before slowing to 5.5pct in 2024, following the extension of the energy price ceiling and lower commodity prices.

Agerpres