2022 is a complicated year for Romania’s economy. 2021, when the economy performed way above the year-start forecasts, is set to be followed by a challenging 2022, as the economic growth came at a price, namely rising twin deficits.
Also, inflation, which in early 2021 was expected to hit 2.5% at yearend, in November reached 7.8% and is projected to come in at 7.7% by yearend.
Had the government not capped energy and gas prices, financial analysts believe inflation could have topped 9%. By the estimates of the National Bank of Romania, inflation is likely to cool down toward the second half of 2022. The government banks on 4.7% inflation at end-2022, with an annual average of 6.5%.
State budget revenues are projected at RON440 billion in 2022, up 12% from 2021, also aided by inflation. The revenue increase is viewed as upbeat by financial analysts, particularly as regards tax income, with the government hoping to raise an additional RON10 billion in the wake of better tax collection.
Romania’s trade gap at end-2021 is set to reach EUR23.5 billion, weighing on the national currency, with echoes across the entire economy. In 2022, Romania’s trade gap will top RON26 billion, with no decrease outlooks, at least on the short term.
All the risks and challenges for the economy in 2022 are doubled by the impact of the health crisis. At the same time, the direction of Europe’s economy is key for the performance of the Romanian economy as the euro zone is by far Romania’s biggest trade partner.
(English version by Catalina Apostoiu)