October 25 (SeeNews) - Although Romania is regional leader in terms of economic growth, there is significant room for improvement, a senior official of the European Bank for Reconstruction and Development (EBRD) has said.
GDP data and growth rates make Romania the undisputed leader in the region, but "room for convergence is still very much there", Matteo Patrone, EBRD's director and regional head for Romania and Bulgaria, said during a business forum in Bucharest, according to a press release issued by the bank on Wednesday.
On a wide scale of comparators – from GDP per capita to infrastructure development – significant catch-up potential persists. For investors this is good news, because both the government and private individuals still have pent-up demand which will fuel further growth.
However, while public debt is "under control", the need for investment "remains significant", the EBRD director said.
EBRD's current strategy for Romania focuses on supporting private businesses through broadening access to finance, developing commercialised infrastructure and enhancing the competitiveness of the private sector.
One large remaining challenge for the country is the persistence of significant regional disparities that can be mitigated and reduced by the emergence of a 21st century infrastructure, in particular in the transport sector, the EBRD said
For that to happen there is a need to change the growth model from consumption to investment driven, Patrone said.
In its latest forecast released in May, EBRD raised its expectations for Romania's economic growth to 4% in 2017, but warned that the government may not meet its budget deficit target. However, a new forecast due to be published in November is likely to be closer to Romania's government estimate of 5.6% economic expansion in 2017.
In 2016, Romania's economy grew by 4.8% year-on-year compared to a revised growth rate of 3.9% in 2015.
Romania's annual economic growth accelerated to 6.1% in the second quarter of 2017, above the initial estimate of 5.9% made in September, according to preliminary official data.
The EBRD is a leading investor in Romania and to date has invested 7.5 billion euro ($8.82) in some 400 projects in the country. Matteo Patrone has headed the Bank’s operations in Romania since June 2015.
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