Macroeconomic Report Romania

In its basic scenario for 2014, Coface estimates that the annual increase of the GDP shall be not more than 2.5%, as the final value depends on the spending level in December (including the governmental one).

In 2015, economic activity is expected to maintain an upward trend, with a superior margin increase versus 2014. This trend shall be supported by: private spending, more significant contribution of the gross capital formation, both private and institutional, no contribution to economic growth from agriculture, negative contribution from foreign trade. Therefore, in the basic scenario, the increase of the real GDP in 2015 is estimated to reach 2.7%, with a possibility to vary between 2.5% - 3% if agriculture sees a dynamics close to the long-term trend.

The current account deficit registered in 2014 shall not exceed 1% of the GDP, and it may rise as high as - 1.5% of the GDP this year, due to a faster growth in imports. The financing of the current account deficit is currently covered by the level of direct foreign investments, as well as by the prospects of growth in the intake of European funds, as 2015 is the last year when the amounts allocated for the 2007 - 2013 programs are to be received.

2015 shall begin with an annual inflation rate below 1%, which shall then see an upward trend towards NBR's 2.5% target, in the second half of the year. Thus, according to the basic scenario, the annual average inflation rate in 2015 shall not exceed 2%, but there may be surprises from the supply side inflation or the results from the agricultural production, both with high degrees of incertitude.

The monetary policy over the last year (the decrease of the reference interest rate and of the mandatory minimal reserves for deposits) should have a favorable effect on the prospects to revive loaning and supporting economic growth.

This is already noticeable, at least from the perspective of new loans orienting towards the local currency, with their weight rising in the banks' portfolios. However, the private sector's appetite for crediting continues to be low, both in the corporate, and in the household segments.