The major growth driver of the GDP advance will remain the private consumption, given its relatively robust dynamics anticipated across the projection horizon, because of the increase in social transfers and in the gross minimum wage economy-wide in 2022, as well as amid the step-up in inflation, the gradual rise in bank rates and the fiscal consolidation progress.
Gross capital formation could post significantly more modest dynamics than in the earlier forecast, primarily during 2022, yet faster than the pre-pandemic average, Romania’s central bank Board members noted. That would owe to the probable increase in public capital expenditure, also with a contribution from EU funds, and to the presumed stimulative effect on the private sector, but also to the dampening influences stemming from costlier energy and building materials, as well as from bottlenecks in production chains and the relative tightening of financial conditions.
By contrast, net exports were anticipated to exert a minor contractionary impact on both 2022 and 2023, considerably smaller than in 2021.
The outlook on the current account deficit saw, however, a relative worsening, as the external deficit as a share of GDP had probably followed a sharper than expected uptrend in 2021, exceeding European standards even further, while in 2022 and 2023 it was expected to witness only mild downward corrections, amid, amongst others, the persistence of constraints on domestic output and of unfavorable dynamics of international prices for commodities and goods.
(English version by Loredana Fratila-Cristescu)