January 9 (SeeNews) - The World Bank said it has marginally increased its forecast for Romania's economic growth in 2020 to 3.4%, from 3.3% projected in June 2019.
Romania's economic growth was estimated at 3.9% in 2019, up from to 3.6% forecast in June but down from 4% expansion in 2018, according to the World Bank's January 2020 Global Economic Prospects report published on Wednesday.
The World Bank's forecast for Romania is more pessimistic than the government's expectations. On Monday, Romania's president Klaus Iohannis endorsed the 2020 state budget based on projections for economic growth of 4.1% and cash deficit equivalent to 3.59% of GDP, above the EU’s 3% threshold.
According to World Bank's report, in many economies in Central Europe, the policy space to confront negative shocks is limited by persistent budget deficits.
"Fiscal support has contributed to these growing imbalances— increasing public sector wages, rising government transfers, and low tax capacity, have widened fiscal deficits, with the latter approaching or exceeding 3% of GDP—the upper limit of the EU threshold, particularly in Romania," the World Bank said.
According to the World Bank, the Central Europe region comprising Bulgaria, Croatia, Hungary, Poland, and Romania will achieve economic growth of 3.4% in 2020.
(1 euro=4.7774 euro)