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BUCHAREST (Romania), September 18 (SeeNews) - Romanian finance ministry analysts said they have raised their forecast for the country's 2017 economic growth to 5.6% from 5.2% previously based on expectations of a more robust performance across sectors than originally projected.
The National Prognosis Commission (CNP), an analyst unit within the finance ministry, said in a statement on Friday that Romania's gross domestic product (GDP) would total 837.1 billion lei ($217 billion/182 billion euro) in 2017. This compares to an estimated volume of 761.5 billion lei in 2016.
Economic growth in 2017 will be backed by a more rapid increase - by 7.3% - in final household consumption, CNP said, revising its April forecast for a 6.3% rise. For 2016, CNP estimated an increase of 6.9% of final household consumption.
Romania's annual economic growth accelerated to 5.9% in the second quarter of 2017 from 5.7% in the prior quarter on the back of strong performance of the industrial sector and rising consumption, according to the latest data available from the country's statistical office, INS. Final household consumption increased by 6.9% on the year and by 2.6% on the quarter during the second quarter of 2017, INS data showed.
The CNP said it expects agriculture to grow by 3%, services by 5.6%, construction by 1.5% and industry by 7.6% in 2017. These figures compare with April forecasts of 1.9% advance in agriculture output, 5.3% rise in services, 5% growth in construction and 6% growth in industry.
Exports of goods and services are expected to grow by 9% in 2017, while imports are seen increasing by 11.5% in 2017, according to the latest CNP projections.
Trade balance for 2017 is expected to show a deficit of 12.54 billion euro ($14.9 billion), the CNP said.
Romania's trade deficit increased by 33% year-on-year to an estimated 6.824 billion euro in the first seven months of 2017. Exports rose by 9.4% while imports grew 12.6% on the year during the January-July period.
Regarding unemployment rate, CNP expects that it will fall to 5.3% in 2017 from an estimated 5.9% in 2016.
Romania's unemployment rate rose to 5.2% in July from a revised 5.0% in June, INS data showed.
The finance ministry analysts left unchanged their economic growth forecasts for the next three years made in April - 5.5% in 2018, and 5.7% in 2019 and 2020 each.
In August, Fitch Ratings affirmed its projections that Romania will post economic growth of 5.1% this year but warned of risk of overheating.
"Romania has posted another quarter of rapid economic growth, but pro-cyclical fiscal policy and rapid wage growth in 2017 have increased overheating risks," Fitch Ratings said in a commentary published on its website. Fitch forecasts that growth will slow down in 2018 and 2019 to 3.4% and 3.5% respectively, as policy stimulus eases.
In June, the World Bank said it raised its forecast for Romania economic growth in 2017 to 4.4% from 3.7% projected in January.
(1 euro =4.5982 Romanian lei)