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Nov 02, 2017 18:42 EEST
November 2 (SeeNews) - Greece's Eurobank Ergasias said it expects Romania's economy to expand by 5.5% in 2017.
In 2018, Eurobank expects Romania's economic growth to slow down to 4.4%, the lender said in its Global Economic and Market Outlook published on Wednesday.
Romania's current account surplus, at 2.2% of GDP in 2016, is expected to grow to 3% of GDP in 2017, before it decreases to 2.9% of GDP in 2018.
According to the bank, the announced fiscal easing measures in 2018 may put additional pressure on budget deficit.
"The political tensions within the ruling party PSD which culminated in the recent cabinet reshuffle plus policy inconsistency stemming from unanchored fiscal policies cast shadows on the macro-outlook," the bank said.
On Thursday, Romania's president Klaus Iohannis asked the governing coalition to abandon a series of tax changes which in his opinion could lead to fiscal turmoil.
In October, Romania's ruling coalition formed by the Social Democrat Party (PSD) and their junior partner, centre-right Liberal-Democrat Alliance (ALDE) unveiled a draft emergency ordinance project to amend the country's fiscal code. The project introduces tax and income changes starting January 2018 which have been widely criticized by the business community.
In 2016, Romania's economy grew by 4.8% year-on-year, compared to a revised growth rate of 3.9% in 2015.
The government has projected 5.6% GDP growth in 2017.
Romania's consolidated budget showed a deficit equivalent to 2.41% of GDP last year, compared to a shortfall of 1.47% of GDP in 2015.
In Romania, Eurobank owns Bancpost. Elsewhere in Southeast Europe, Eurobank is present in Bulgaria and Serbia.
In September, Eurobank Ergasias said it has entered into negotiations on the potential sale of its subsidiaries in Romania to Cluj-based Banca Transilvania.
(1 euro=4.5981 lei)
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