In spite of the fact that international financial institutions, the Romanian government and economic analysts estimated at the start of the year that Romania will register an economic growth rate of 1.6% in 2013, they have recently revised upward the growth rate. For instance, the International Monetary Fund has improved the economic forecast for this year to 2% and to 2.5% for 2014, against the backdrop of bigger exports and a better agricultural output than in 2012. The IMF estimates that Romania’s current account deficit will further decrease to 2 or 2,5% of the GDP this year, and the inflation rate will also go down by the end of the year, within the limits targeted by the National Bank of Romania.
The head of the IMF mission to Romania, Andrea Schaechter, has said that “as regards the fiscal policy, the Romanian government is determined to achieve a gradual fiscal consolidation. Once the budget revision announced, the government made public its decision to reach a deficit of 2.3% of the GDP on cash and 2.4% on the European System of Accounts (ESA) this year, as well as a structural deficit below 1% of the GDP until 2015”, says Andrea Schaechter. She has mentioned that the fiscal policy will be supported by institutional reforms, including measures to stimulate medium term planning, develop the administrative capacity, speed up the absorption of European funds, consolidate fiscal administration and governance and ensure a better control of arrears.
Nevertheless, according to the September report issued by Economist Intelligence Unit, Romania’s economy will go up by 2.5% in 2013, which “mirrors the situation in the Euro zone, with the growth rate expected to increase considerably in the 2014-2017 period, up to an annual average rate of 4%”.
The vice-president of the European Investment Bank, Mihai Tanasescu has said that in order to ensure economic growth, which is essential to absorb European funds, Romania should take some steps: “We stand a big chance, an unique chance that other countries don’t stand, namely the opportunity to attract more European funds, to be able to use cheap investment money, such as those coming from the European Investment Bank, to be able to use resources for big projects, so that the economic growth rate reaches Romania’s potential, of 3-4%. This thing is achievable, in 2-3 years’ time. This potential can be reached.”
According to the aforementioned report drawn up by Economist Intelligence Unit “a better absorption of European funds will contribute to the investment in infrastructure and subsequently might lead to an increase in Romania’s exporting potential on the long term. Romania has obtained structural funds worth 22 billion Euros from the EU budget, for the following budgetary term. Romania will also receive funds for agriculture, worth 17.5 billion Euros in the 2014-2020 period, under the Common Agricultural Policy, which is a significant increase from the 13.8 billion Euros in the 2007 – 2013 period.
