The Bank also cut its estimate on the 2014 growth to 2.2%, from 3.4% initially, according to a report on global economic prospects released Wednesday. The Bank expects Romania’s economy to grow by 3% in 2015.
Romania’s Government has set its target for economic growth at 1.8% of the gross domestic product this year.
At the beginning of November, the European Commission estimated an economic growth of 2.2% for Romania in 2013 and of 2.7% next year.
“The rebound (in Europe and Central Asia, e.n.) in 2013 is projected to be limited as most of the factors that constrained the growth in 2012 are likely to remain present albeit less forcefully. Prospects for the region critically depend on tackling large current account and fiscal deficits, high unemployment and inflation, lack of competitiveness and other structural constraints to the economies,” reads the report.
Regional GDP is projected to firm to 3.6% in 2013 and to 4% in 2014.
According to the Bank, the region’s economic outlook remains subject to serious global and regional risks.
“Given Europe and Central Asia region’s close financial and trade ties with high-income Europe, it would be directly impacted by both a major deterioration of the debt crisis or slow-growth/stagnation in the Euro Area,” reads the report.
The high levels of non-performing loans in the region’s banking system may further limit the already slowing credit growth, the Bank said, adding that, “nevertheless, there is some level of resilience in most banks in the region with their capital adequacy ratios in excess of 10 percent by the end of 2011.”