Page 66 - SE Outlook Regions 2023

2.9.1 GDP growth
Romania’s economy decelerated slightly during 2022 and more
markedly in H2 to a still robust 4.6% annual rate, from 5.1% in 2021.
But it is expected to grow by only 2-3% in 2023 and to recover
marginally towards growth rates of not much above 4% in the coming
years.

Exogenous developments (such as the recession in Europe) will matter,
but the absorption of funds under the EU budget and under the
Resilience Facility are key for the country’s growth profile over the
medium term, furthermore with a long-term impact on the size of the
potential growth rate.

The country’s largest financial group Banca Transilvania believes
Romania’s economy will decelerate to a still significant 2.4% growth in
2023. The government based its budget planning for 2023 on slightly
more optimistic expectations of 2.8% GDP growth. The most
pessimistic forecasts for the Romanian economy’s advance in 2023
were drafted by the European Commission (+1.8%) and Fitch rating
agency (+1.6%), while the International Monetary Fund (IMF) and
World Bank trust the country’s economy can grow by more than 3%,
according to the latest available projections.

Partial recovery will take place in 2024, when the country’s GDP is
expected to rise by 3.7%, according to Banca Transilvania’s most
recent projection. The government hopes for 4.8% growth in 2024.

The projected recovery is based on expectations of productive
investments accelerating to 7.6% in 2024, after steadily growing by
5.3% in 2022 and by 5.2% in 2023 against the background of low real
financing costs and the implementation of European programmes,
under Banca Transilvania’s scenario.

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