“External demand is expected to continue to contribute negatively in 2012 due to the worsening economic outlook for the EU which accounts for about 70% of Romania’s exports,” the Commission said in its spring forecast report.
It said weaker external demand will depress export growth in 2012, but imports will decrease less, being supported by domestic demand.
“The resulting increase in the trade deficit will lead the current-account deficit to widen to 5%,” the report noted.
In 2013, economy growth is estimated to accelerate to 2.9% as domestic demand recovers. Previous forecasts put the 2013 gross domestic product at 3.4%.
The Commission expects Romanian annual inflation to remain within the central bank’s target in 2012, despite upside risks from possible increase in administered energy prices.
“Conversely, a slower-than-expected economic recovery would have disinflationary effects,” the Commission added.
Romania’scentral bank targets an annual rate of 3% in December, plus/minus one percentage point around the band.