Ooni Koda
  1. Home
  2. /
  3. Newsfeed
  4. /
  5. OTP Bank expects 4% economic growth in Romania,...

OTP Bank expects 4% economic growth in Romania, to possibly ease below 3% in 2023

July 21, 2022

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.

The text of this article has been partially taken from the publication:
Read in full - click here
Iohannis, în Tirana: Romania is ready to continue supporting EU efforts to combat illegal migration along Western Balkan routes

Although Romania is not on the Western Balkan migration route and is not "a relevant source" of migrant flows within the EU, our country is ready to continue supporting the EU's efforts to combat illegal migration, President Klaus Iohannis told the EU - Western Balkans summit in Tirana on Tuesday."As far as migration is concerned, […]

Austria officially said "No" to Bulgaria and Romania in Schengen

Austrian Chancellor Karl Nehammer stated that Austria opposes the accession of Bulgaria and Romania to the Schengen area. He made this statement during the EU-Western Balkans summit in Tirana, https://www.novinite.com/ reports.   "The Minister of the Interior made it clear. There is no approval from Austria for the enlargement with Bulgaria and Romania. More time is needed. We have 75,000 unregistered illegal immigrants in Austria. […]

Chief of the Defense Staff, visit to Portugal: Situation on NATO's Eastern Flank on agenda of discussions

  Chief of the Defense Staff, General Daniel Petrescu was on an official visit to Portugal, Sunday to Tuesday, at the invitation of his counterpart, Admiral Antonio Manuel Fernandes da Silva Ribeiro, the officials analysing, in context, the regional security situation.The visit also included meetings with the Portuguese Minister of National Defense, Maria Helena Chaves […]

Interreg VI-A Romania- Bulgaria approved by European Commission

Interreg VI-A Romania- Bulgaria programme was approved by the European Commission, the Romanian Development Ministry announced. The programme has a budget of over 200 million euros and is devoted to communities from seven Romanian counties and eight Bulgarian districts.   The Development, Public Works and Administration Ministry declared, in a press release, that the Programme […]

Draft budget for next year is built on economic growth of 2.8%

The draft budget for next year is configured on an economic growth of 2.8%, in the context in which the economic shock caused by the pandemic is one of the most significant in recent history, shows the draft state budget law for 2023 published on Tuesday by the Ministry of Finance.The gross domestic product in […]

INSCOP poll: The majority of Romanians believe Romania of tommorrow will look better

A survey carried out by INSCOP Research reveals that the majority of Romanians believe that the Romania of tomorrow led by today's children will look better, as 54pct of the respondents shared this particular opinion, while 25.2pct said the situation in the country will get worse when led by the children today and 15.7% say […]