World Bank affirms Romania's 2024 GDP growth f'cast at 3.3%

The World Bank revised its estimate for Romania's GDP growth in 2023 to 2.1%, adding 0.3 percentage points (pp) over its January forecast, the global lender said in its Spring 2024 Europe and Central Asia Economic Update report. The country's 2022 GDP growth rate was also revised to 4.1%, slashing 0.5 pp from the estimate in the January report.

Romania has made significant progress in its economic performance and convergence with the European Union, but still faces key challenges such as regional disparities, weak institutions, skilled labor shortages, poor connectivity, and vulnerabilities to natural hazards and climate change, as per the report. The country's poverty and inequality have remained among the highest in the EU.

The World Bank said that key short-term goals that Romania should aim for are curbing inflation and addressing fiscal pressures, which are particularly significant in the 2024 election year. The bank urged the country to maximize the absorption of EU funds by implementing reforms under the National Recovery and Resilience Plan (NRRP). Romania prepares for EU and municipal elections in June and presidential and general elections scheduled to take place by the end of 2024.

Romania's economic growth is seen to accelerate to 3.8% in 2025, the World Bank said, affirming its January projection. GDP growth is projected to remain at 3.8% in 2026.

Romania's National Commission for Strategy and Prognosis, an analyst unit within the finance ministry, predicted in February that Romania's economy will expand by 3.4% in 2024 and by 4% in 2025.

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