Romania’s economy could return to pre-pandemic levels by mid-2022, following a 3.7% increase in gross domestic product (GDP) in 2021 and of 5% in 2022, after a contraction of about 5.5 % in 2020, according to a quarterly report on macroeconomic analysis and strategy of UniCredit Bank.

According to the quoted source, private consumption will recover in Q2 2021, after the unemployment rate will reach its maximum level, in Q1 2021. Investments will be dominated by infrastructure spending, supported by higher inflows of European funds, which could cover the current account deficit.

The report anticipates a decline in the budget deficit to 7% of GDP in 2021 and 4% of GDP in 2022, respectively, keeping public debt below 50% of GDP by 2022 and the country’s rating in the investment grade category. This year, the euro-leu exchange rate could move in the trading range of 4.90-5.00.

According to the document, in 2021, direct and indirect anti-crisis support could fall to 3.1% of GDP from around 5.7% of GDP in 2020. Despite maintaining support measures for technical unemployment and part-time work , economists anticipate an increase in the unemployment rate to over 6% in 2021, with a second wave of redundancies likely to happen in Q1 2021. This could delay the return of consumption until Q2 2021. However, consumption intentions remain at a level high, and this is also seen in the intention of consumers to access credit, as measured by banks. Thus, private consumption could return to pre-crisis levels by Q4 2021.