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Romanian economy to shrink 4.2% in 2020, analysts say

Romaniaʼs economic output will fall by 4.2% in 2020, Finance Ministry analysts said on Wednesday, revising their previous forecast for a 3.9% contraction due to expectations of lower than originally projected performance across sectors, local media reported.

Graphic by AlexLMX / Shutterstock.com

According to the National Prognosis Commission (CNP), an analyst unit within the ministry, Romaniaʼs gross domestic product (GDP) would total RON 1.050 trillion (EUR 215 billion) in 2020. For 2021, the commission expect the economy to return to 4.5% growth, compared to a 4.9% rise in gross domestic product (GDP) estimated in the prognosis made in August.

According to the commission, the budget deficit has increased by RON 5 billion up to 9.15% of the gross domestic product (GDP), after forecast in August had given a deficit of 8.6% of GDP.

The government plans to increase budgets of several ministries at the upcoming budget rectification, such as: Development Ministry by one billion lei, by RON 1.1 billion the Agriculture Ministry, with RON 160 million compensations for the farmers affected by drought. The budget of the health insurance sole fond will be supplemented by RON 1.1 billion. The Health Ministry gets RON 1.2 billion more. The budget deficit forecast for 2021 is 7%