“Although constrained by the continuing needs for repairing households’ balance sheets, private consumption is expected to pick up on the back for improving consumer confidence and increasing real disposable income as employment grows and inflation remains moderate,” the Commission said.
It said investment is expected to regain momentum in 2014, supported by a better absorption of EU funds as “major infrastructure projects are expected to gain traction.”
Inflation is projected to decelerate to an average of 2.5% in 2014, from around 3.3% in 2013, with cheaper food estimated to drive the annual rate to historical lows in the first half of next year.
The Commission forecasts Romania’s unemployment rate will remain slightly above 7% in the next years.
“Youth unemployment remains high at 23% but it is expected to fall supported by a number of policy measures elaborated in the National Job Plan to facilitate the entry into the labor market of young people,” the report showed.