The Group’s revision comes after Romania’s statistics board INS confirmed on Sept 7 the country’s robust GDP growth of +5.7% for the first half of 2022.
Instead, Erste Group lowered its forecast on Romania’s economy to 2.7% in 2023 from 4% previously, as per an analysis by BCR chief economist Ciprian Dascalu, according to Ziarul Financiar (ZF) daily.
BCR estimates a decrease in Romania’s GDP growth in the third quarter of 2022, followed by stagnation in the fourth quarter of 2022.
“Given the weak structure of GDP growth in H1 and the expected moderation of the external demand in H2, we cannot eliminate the possibility of a technical recession, even if this is no longer our base scenario at the moment,” the report reads.
The upward risks to the forecasts come from the Government injecting into the economy funds equivalent to 3.9% of GDP in the last five months of 2022 – under the assumption that the Executive can still finance the planned budget deficit of 5.8% of GDP.