The Romanian economy might decrease by 4 percent in 2020 due to the Coronavirus pandemic, reads a report by the European Bank for Reconstructions and Development (EBRD). However, the European Banks forecasts a rise by 4pc in 2021.
The contraction of the domestic economy is partially explained by the higher exposure to the Italian economy- Romania’s exports of goods to Italy represent 10 percent of the total.
The growth in 2021 is expected to be driven by the private sector after it recovers. However, the rise depends on the gradual relaxing restrictions in order to reduce the spread of the virus and to get back to normal in the second part of the year.
EBRD also says that the adopted fiscal stimulation package of around 3 pc of GDP aims at injecting liquidity and at keeping jobs. An extra aid might be limited amid fiscal policies, with a deficit target of 6/7% of GDP in the amended budget.