Fiscal consolidation efforts remain critical, and they should address the large structural deficit – which requires reforms to strengthen revenue mobilization and increase spending efficiency, the bank pointed out.
In 2022, the public deficit is seen at 6.6% of GDP, 0.8pp above the 5.8% target.
The sizable funds expected under the Resilience and Recovery Facility, the multiannual financial framework 2021-2027, and other EU-funded programs should alleviate some of the fiscal pressures resulting from the war and heightened energy and food prices, the WB reasons, envisaging gradual shrinking of the public gap.
As for the general forecast, the World Bank sees Romania’s economy growing by 4.6% in 2022 (and notably by 3.2% in 2023), with projections subject to a high degree of uncertainty. A global slowdown and a possible recession in the main trading partners could impact Romania’s growth in 2023.