“ING’s forecasts are highly optimistic […] Romania’s exceptional performance leads us to believe that the growth potential may reach 4% to 5% in the coming years,” Misu Negritoiu told a financial forum organized by Mediafax.
The bank executive estimates an annual inflation rate in Romania of 3% by 2020, while the leu’s exchange rate is seen at 3.5 against the euro, from around 4.45 to the euro currently.
ING forecasts an economic growth of 2.5% in 2013, well above the region average. Additionally, the lender expects the disinflation process will continue for another three to five years, while domestic consumption is seen picking up as of next year.
However, peer lender UniCredit Tiriac Bank is less optimistic about the economic growth in 2014, warning that this year’s bumper crops could trigger a negative base effect in the following year.
“Romania’s economic growth accelerated in 2013 on the back of an excellent farm output. However, the prospects for the next period are dim, as the positive contribution of this year’s harvest is only temporary and might even create a negative base effect in 2014,” said Daniela Bodirca, vice-president of UniCredit Tiriac Bank.
Bodirca said the industry had also a positive effect on the economic growth in the first nine months of 2013, but investments made a negative contribution.
“This should raise a question mark, because this type of evolution could prove challenging for the medium and long-term growth,” she added.
The bank official estimated the economic growth rate remains well below its potential.
“The economy will expand at a slower rate in 2014 compared with 2013, mostly due to a negative base effect triggered by agriculture. However, this effect can be offset if the absorption of European Union funds increases,” Bodirca said.
Romania’s economy increased 1.6% on the quarter in the July-September period, the fastest growing rate in the EU. In the first nine months of 2013, the gross domestic product expanded by 2.7% compared with the same period a year ago.