IMF lowers Romania's 2024 growth forecast to 1.9%
<p>The International Monetary Fund (IMF) has revised its growth forecast for Romania's economy in 2024, lowering its estimate from 2.8% to 1.9%, according to the latest World Economic Outlook (WEO) report. This projection, still optimistic, contrasts with Romania's GDP growth of only 0.7% y/y in the first half of 2024 and the likelihood of weaker performance in the second half due to adverse base effects.</p>

<p>The IMF report anticipates a rebound for Romania in 2025, forecasting growth of 3.3%.&nbsp;</p>

<p>However, the government's own medium-term fiscal-structural plan, recently submitted in Brussels, projects economic growth of 2.7% for both 2024 and 2025.</p>

<p>On a global scale, the IMF maintained its 2024 forecast for economic growth at 3.2% but lowered its 2025 projection to the same level, citing expected slowdowns in major emerging economies.&nbsp;</p>

<p>Pierre-Olivier Gourinchas, the IMF's chief economist, warned that risks have intensified, particularly due to geopolitical tensions and economic fragmentation, which could drive up energy prices.</p>

<p>Romania's current account deficit is set to widen this year, with the IMF now forecasting a deficit of 7.5% of GDP, up from its April projection of 7.1%. The deficit is expected to reduce gradually, reaching 7% in 2025 and 5.9% by 2029, although it will remain elevated in absolute terms.</p>

<p>Inflation in Romania, which spiked to 10.4% in 2023, is expected to moderate, with the IMF projecting an average annual increase of 5.3% in 2024 and 3.6% in 2025. This represents a slight improvement on the IMF's earlier forecast in April, which predicted inflation of 6% in 2024 and 4% in 2025.</p>

<p>Unemployment is expected to remain stable at 5.6% in 2024, with a modest decline to 5.4% in 2025, according to the IMF's latest estimates.</p>

<p><em>iulian@romania-insider.com</em></p>

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