The Fund also expects Romania’s economy to grow 3.1% in 2023 versus 4.5% estimated in June 2022.
Romania’s current account deficit is projected to climb to 8.4% of gross domestic product (GDP) in 2022, from 7% in 2021, and to narrow to 8% in 2023, the report shows.
The annual inflation rate is anticipated to surge to 13.3% in 2022, from 5% in 2021, and to slow to 11% in 2023.
The unemployment rate in Romania is projected to edge down to 5.5% at the end of 2022, from 5.6% in 2021, and to remain at 5.5% in 2023.
Currently, Romania has no ongoing funding arrangement with the IMF.
In September, the IMF welcomed Romania’s strong economic recovery from the pandemic but noted that the spillovers from Russia’s war on Ukraine—mainly through indirect channels—and tighter financial conditions have clouded the outlook with downside risks and higher uncertainty. Against this backdrop, directors underscored the importance of implementing prudent macroeconomic policies that safeguard macroeconomic stability and of reenergizing structural reforms to boost economic growth, the IMF said at the time in a press statement following the conclusion of Article IV consultations with Romania.
The IMF also said in its report there is a growing risk that the global economy will slide into recession i 2023 as households and businesses in most countries face “stormy waters”. The growth forecast for 2023 is the lowest for the year ahead that the IMF has published since 2001, apart from the years of the coronavirus pandemic and following the global financial crisis. The 2022 global growth forecast has declined from 4.9% in the fund’s report a year ago to 3.2% now. The 2023 growth estimate was cut from 3.6% a year ago to 2.3%, with the downgrades concentrated in advanced economies rather than in the emerging world.
The fund forecasts inflation in advanced economies will hit 7.2% in 2022 and 4.4% in 2023, both more than 1 percentage point higher than its previous April forecasts for 2023. For emerging and developing economies, consumer price growth will peak at an annual pace of almost 10% in 2022 before moderating to 8.1% in 2023.
The US economy is expected to stagnate over the four quarters of 2022 and then maintain a sluggish 1% growth rate in 2023. Many European countries will fall into recession, the IMF predicted, as households and companies struggle to cope with natural gas prices five times 2021 levels.
China’s zero-Covid policy and fragile housing market, the need to raise interest rates to control inflation in advanced economies, and higher energy and food prices following Russia’s invasion of Ukraine will lower world economic growth from 3.2% in 2022 to 2.7% in 2023, the fund also predicted.