The Economist: Romania to have the highest economic growth in Europe in 2017

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British magazine The Economist forecasts in its recent ‘The World in 2017’ report an average annual real GDP growth of 4.8 percent for Romania in 2016 and 3.4 percent in 2017, the biggest advance in Europe, supported by consumption.

In this regard, Romania is followed by Turkey (3.3 percent), Bulgaria (3.2 percent) and Ireland (3 percent).

However, the publication warns that the country has too many state employees and the regress on modest reforms made after the financial crisis will increase the budget deficit, exceeding the 3 percent ceiling of GDP.

At the same time, Romania will end 2017 with a budget deficit of 3.2 percent of GDP and an inflation rate of 2.2 percent.

“The outcome of the December 2016 parliamentary election is the most unpredictable in the post-communist period, but the June 2016 local elections suggest that the Social Democratic Party (PSD) will win. The year-old technocratic government led by Dacian Ciolos has largely implemented fiscal stimulus policies agreed by the former PSD government, which have spurred rapid growth of 6 percent in the first half of 2016,” The Economist reads.

Romania will reach a GDP / capita of USD 10,335, at par value, and USD 24,780, adjusted value to purchasing power parity. In terms of economic indicators, the domestic economy is at the same level as the Russian economy, which next year will reach a GDP / capita of USD 10,119 at face value and USD 25,320 at purchasing power parity.

But The Economist highlights also the vulnerabilities of the Romanian economy for the next year, noting that the interim government, installed after when the protests overturned in 2015 the Executive resulted after elections, will be replaced after the elections at end- 2016, probably by a broad coalition, but weak, reflecting the dissatisfaction with politicians, widespread among voters.

In Eastern EU, Poland is expected to record a 2.9 percent economic advance, Hungary – 2.4 percent and the Czech Republic – 2.5 percent

Europe’s big economies will record modest increases. The Economist estimates a growth of 1.3 percent in Germany, 1.1 percent in France, 0.9 percent in Italy and only 0.6 percent in the UK.

 

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