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joi, 18 aprilie 2024 - 6:35
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Erste Group revised Romania’s GDP growth forecast from 4.2% to 6.7%


Erste Group has revised the economic growth forecast for Romania in 2021 to +6.7% from +4.2% after ”big positive surprises in 4Q20”, with subsequent carry over effect, and in 1Q21.

”The advance in vaccination and lifting restrictions should play a key role in shaping up the economic recovery. Bucharest and several large cities where economically active population is concentrated have vaccination rates close to or above 40%, although the overall campaign in Romania still has a long way to go”, said the analysts of the banking group on Tuesday.

Real GDP delivered a positive surprise and increased by +2.8% q/q in 1Q21, above the forecasts. In y/y terms, real GDP moderated its contraction to -0.2% in 1Q21 from -1.4% in 4Q20.

Other conclusions of Erste Group:

  • Real income growth is expected to barely grow this year, with the labour market yet to fully adjust to the permanent changes in consumer behaviour. Pent-up household demand and state investments financed by EU funds should be main growth drivers over the next quarters.
  • GDP breakdown data is due 8 June. High-frequency hard data for the first quarter of the year suggest that, on the supply side, industrial production which expanded by +1.3% q/q, construction works by +1.6% q/q and business services by +2.8% q/q were the main economic growth drivers. Consumer services surged by +32.7% q/q, benefiting from a partial easing of the lockdown measures. On a weaker note, retail sales contracted by -1.2% q/q in 1Q21.
  • Economic Sentiment Indicator (ESI) increased to an average value of 90.7 in 1Q21 from 87.3 in 4Q20 helped by the manufacturing and retail components. April brough additional strong gains for ESI which bode well for the 2Q21 real GDP prospects.