In 2023, Romania's economy is seen growing by only 3.1%, compared to 4.5% estimated in June, the IMF said in its World Economic Outlook report for October 2022.
Romania's current account deficit is forecast to rise to 8.4% of GDP in 2022, from 7% in 2021. In 2023, the current account gap is seen narrowing to 8%, according to the report.
Consumer price inflation is seen surging to 13.3% in 2022 from 5% in 2021. In 2023, the IMF sees inflation slowing to 11%.
Unemployment in Romania is projected to edge down to 5.5% at the end of 2022, from 5.6% in 2021. In 2023, the unemployment rate is projected to remain at 5.5%.
The IMF also said it expects the GDP of Emerging and Developing Europe area comprising Romania, Russia, Turkey, Poland, Ukraine, Hungary, Belarus, Bulgaria, Serbia and Croatia to have zero economic growth in 2022, and advance by 0.6% in 2023.
Romania's economic output will increase by an estimated 3.5% in 2022, analysts at the country's finance ministry said in August, improving their previous forecast for 2.9% growth. The country's GDP grew by 5.9% in 2021, compared to a 3.9% contraction in 2020.
Currently, Romania has no ongoing funding arrangement with the IMF.
In September, the IMF welcomed Romania’s strong economic recovery from the pandemic but noted that the spillovers from Russia’s war on Ukraine—mainly through indirect channels—and tighter financial conditions have clouded the outlook with downside risks and higher uncertainty. Against this backdrop, directors underscored the importance of implementing prudent macroeconomic policies that safeguard macroeconomic stability and of reenergizing structural reforms to boost economic growth, the IMF said at the time in a press release following the conclusion of Article IV consultations with Romania.
The IMF also stressed the need to pursue medium-term fiscal consolidation to rebuild buffers, safeguard fiscal sustainability, and reduce external imbalances.
