IMF cut Romania’s economic growth forecast to 2.4 pc

Despite setbacks, an uneven global recovery continues. Largely due to weaker-than-expected global activity in the first half of 2014, International Monetary Fund (IMF) forecast for the world growth economy has been revised downward to 3.3 percent for this year, 0.4 percentage point lower than in the April 2014 World Economic Outlook (WEO). The global growth projection for 2015 was lowered to 3.8 percent.

Regarding Romania, the international financial institution reduced its estimate for economic growth in 2014 from 2.8 percent (June forecast) to 2.4 percent. For next year, IMF maintained its 2.5 percent economic growth estimate. “Economic recovery in emerging and developing Europe continued to be uneven, with growth remaining strong or accelerating in Hungary, Poland, and Turkey in 2013 and into the first half of 2014, but slowing in southeastern Europe,” IMF analysts note. In the region, growth is forecast to reach 2.7 percent in 2014 and 2.9 percent in 2015. The forecast entails an upward revision to growth in 2014 of 0.4 percentage point relative to the April 2014 WEO projections, mainly reflecting the stronger-than-expected outturn so far this year in some economies, and is unchanged for 2015.

According to October 2014 WEO, growth will be modest in Moldova, owing to a slowdown in agriculture and spillovers from weaker activity in its main trading partners (European Union, Russia, Ukraine).

Eurostat, the statistics office of the EU, announced last month that Romania’s economy had posted the steepest fall, namely 1 percent of GDP, in the second quarter against the first. Although the flash estimate for the first quarter indicated a 0.1 percent expansion of the economy, revised data showed that in fact the economy contracted in the first three months too, by 0.2 percent.