“Real GDP delivered another positive surprise and increased by 2.8% quarter-to-quarter in the first quarter of 2021, above our forecast of 0.7%. In annual terms, real GDP moderated its contraction to -0.2% in the first quarter 2021 from -1.4% in the fourth quarter 2020,” Erste analysts said in a research note Tuesday.
“We revise our economic growth forecast for 2021 to +6.7% from +4.2% after big positive surprises in 4Q 2020, with its subsequent carryover effect, and 1Q 2021,” Erste said.
The research note added the advance in vaccination and lifting restrictions should play a key role in shaping up Romania’s economic recovery. While real income growth is expected to barely grow this year, pent-up household demand and state investments financed by EU funds should be main growth drivers over the next quarters.