Romania's economy will grow by 4% this year, and the growth will slow down to 3.5% in 2023 as the central bank will have to rise the refinancing rate to 7% by the end of this year (versus the 8%-9% ideal rate of the refinancing rate), according to a research report published by OTP Bank Romania. The fiscal consolidation has stalled and will resume maybe next year, while the current account (CA) deficit may exceed expectations this year amid high energy prices and slower fiscal consolidation, the report reads, concluding that the twin deficit issue remains relevant. "In a regional context, the comparison suggests a more optimistic average growth performance for Romania. Although, for next year, the prediction is pessimistic, with a lower expected result. At the moment, all areas are affected, given inflation - trade, real income, interest rates or fiscal consolidation, which has stalled at this time. [...] The positive outlook is also complemented by the fact that Romania is expected to receive European funds of about 3.5% of GDP annually in this forecast horizon," OTP Bank analysts argue, quoted by Bankingnews.ro. "Under the baseline scenario, inflation could peak in June at a level slightly below 15%, but in the period to come, the decline will be slow, and we should be prepared not to see single-digit rates until March next year. Energy and food growth are now passing through to core inflation [...]. In addition, we can anticipate another increase in the price of energy for household use in April next year, when the current cap-and-subsidy scheme expires," the report reads. OTP Bank expects the National Bank of Romania to conduct more hawkish policy towards the end of the year, yet along the line of moderation followed so far. "The current level of the key policy rate, of 3.75%, still lags very much behind the evolutions of the inflation and the risk premium for the Romanian assets and it is very likely to see it increasing to 7.0% by the end of the year, while the market suggests a level of 8-9%," according to bank analysts' expectations.
Henry Páll Wulff, a German citizen living in Romania and former co-chair of Volt Romania political party, emphasizes how the disparate challenges and shifting dynamics in Romania underline the importance of understanding global trends. The year 2024 brought a wave of significant elections worldwide, from the United States to Europe and beyond. Against this backdrop, […]
Social Democrat (PSD) leader Marcel Ciolacu has been appointed by president Klaus Iohannis to form the new government, with the prime minister set to request a vote of confidence from Parliament later today, December 23. Ciolacu thus returns to Victoria Palace as head of government, backed by the newly-emerged ruling coalition. The new cabinet will […]
Igor Feio, a Portuguese citizen living in Romania for over ten years, shares his view on the Constitutional Court's recent decision to cancel the first round of the presidential elections in the country. On November 24, about 9 Million people expressed their vote in the 1st round of the Presidential Elections. It was a somehow […]
Romanian members of Parliament elected new presidents for the Senate and Chamber of Deputies after negotiations within the new ruling coalition formed between the Social Democrats (PSD), the National Liberal Party (PNL), the Hungarian minority party UDMR, and the ethnic minorities group. The coalition elected PNL interim leader Ilie Bolojan as the new head of […]
Romania is quickly becoming one of Europe’s most desirable destinations for expats, thanks to its affordability, vibrant culture, and strategic location in the heart of Europe. Whether you’re considering citizenship, a nomad visa, or residency, each pathway offers unique benefits tailored to different lifestyles and goals. In this article, we’ll explore these options in depth […]
Amsterdam-based DRI, the EU renewables arm of Ukrainian energy company DTEK, announced the signing of the “largest physical solar power purchase agreement (PPA) in Romania” with OMV Petrom, the leading integrated energy producer in Southeastern Europe. The agreement groups three PPAs with OMV Petrom over an 8.5-year period for approximately 100GWh per year at a […]
