The Romanian economy is poised for growth, with a 2.5% expansion expected this year, and an even more accelerated growth rate of 3.5% projected for 2025. Additionally, the country’s deficits are set to gradually decrease, starting from the current year. These forecasts come from the Vienna Institute for International Economic Studies (WIIW) in their latest autumn outlook, which covers 23 countries in the region.

WIIW has adjusted its economic growth forecast for Romania, lowering it by 0.5 percentage points for 2023 and by 0.8 percentage points for the years 2024 and 2025. This adjustment aligns with a generally gloomier global and regional economic landscape.

In 2023, WIIW predicts an average growth rate of 0.6% for EU member states in the region, similar to the modest growth expected in the Eurozone (0.5%). This growth rate is half of what was anticipated in the earlier summer forecast.

Despite this adjustment, Romania stands out among the 11 EU member states in Central and Southeast Europe as the economy with the fastest growth.

WIIW’s projections indicate slightly stronger growth rates in Romania compared to the estimates provided by the International Monetary Fund (IMF), which anticipates growth rates of 2.25% and 2.75% for 2023 and 2024. Furthermore, WIIW envisions a more rapid improvement in deficits.

WIIW foresees Romania’s public deficit at 5.7% for this year and 4.5% in 2024, which is 0.3 and 0.5 percentage points lower than the IMF’s predictions. Nevertheless, in 2025, Romania’s public deficit is expected to remain above the 3% of GDP target.

WIIW also holds the view that Romania’s public deficit will decrease to a relatively secure level of 5.6% of GDP in 2024, in line with a slower fiscal stimulus. In contrast, the IMF forecasts Romania’s external deficit at 7.1% for the coming year.