“A flurry of robust readings in early 2014, from industrial production, exports, retail sales to services to companies, have added to the evidence that the economy is going to rise more quickly than initially expected for the first quarter of 2014,” Erste said in a report Wednesday.
The Austrian bank revised upward its forecast on Romania’s economic growth to 3% in 2014, from 2.3% previously.
However, the lender warned of downside risks to its new projections, largely stemming from a waning consumer confidence, rising inflation and a weaker-than-expected harvest.
Moreover, considering 2014 is an election year, the government could be tempted to “add a ‘social’ tinge to public spending,” Erste said.
Investments could enter positive territory only if inflows of structural EU funds continue to grow and some private and public investment projects already announced are really launched, the report noted.