“Romanian economy will witness a gradual recovery in 2013, aided by local and international factors that look more promising compared with last year,” BCR’s chief economist Eugen Sinca said.
BCR estimates the economy has stagnated in 2012, held back by a weak farming output and declining exports and industrial production.
In its “Romania in 2013” report, BCR said domestic consumption and investments will be the main drivers of this year’s growth.
The bank expects Romania’s annual inflation will come in at 4.1% in December, above the central bank’s upper target of 3.5%, largely due to higher gas and electricity prices.
“Our inflation scenario is slightly more optimistic compared with the previous quarter, due to a stronger leu, a good prognosis regarding this year’s farm output and the still weak domestic demand,” said Sincai.
Absent the adjustment of administered gas and electricity prices, year-end inflation would reach 3.3%, he added.
Sinca said the central bank is unlikely to ease its monetary policy cycle in 2013, but that stronger capital injections will help lower interbank rates.