“The pace of real GDP growth slowed down from 3.5% in 2013 to 2.4% year-on-year in the first half of
2014, largely due to a strong deceleration in the second quarter (1.2% y-o-y). Private consumption and net exports were the main drivers of growth while investments continued to contribute negatively (gross fixed capital formation dropped by 11.1% y-o-y in the first half of 2014),” the Commission said in its autumn forecast.
“As a result, GDP growth in 2014 is projected at 2.0%.”
In the spring forecast, the EU’s executive arm estimated a 2.5% growth for Romania’s economy this year.
“In the second half of 2014, improved confidence and higher real disposable income are expected to support consumption. Investment growth is projected to regain momentum, sustained by both private and public investments.”
The forecast for 2015 was also revised downwards to 2.4% from 2.6% previously seen.
“Against a background of a subdued economic scenario in the euro area, growth in Romania is nevertheless forecast to gradually pick up and stay above potential at 2.4% in 2015 and 2.8% in 2016.”
The prediction is based on higher domestic consumption, fueled by increasing real disposable income “on account of still dynamic growth of wages, low inflation and declining interest rates.”