Romania’s Gross Domestic Product growth forecasts for 2021 have been repeatedly revised positively during the last period, the projection of + 6.5% a few months ago already being corrected by the European Commission at 7.4% and 4.9% for 2022, says Mihai Chipirliu, CFA, Risk Director Euler Hermes Romania.

“Inflation is also forecast to rise to over 3% this year, being one of the highest in the European Union, even if below the level of Hungary or even Poland where it would exceed 4%,” said Mihai Chipirliu.

In the region of emerging Europe as a whole, the annual growth of real GDP is forecast at + 4.6% in 2021 (well offsetting the contraction of -2.7% in 2020), followed by + 3.7% in 2022.

Hungary, Romania, Bulgaria and Turkey exceeded expectations in the first quarter, but should see a moderation in the second quarter, as the number of infections reached a new level in April and supply chain disruptions have diminished growth potential.

“In the case of Romania, although there were also internal factors – such as the resistance of consumer demand – the inflationary surge was strongly fueled in the first half of the year by the sharp global rise in commodity prices. We maintain the opinion that inflation will be rather a temporary phenomenon, with a lower intensity in the second part of the year,” said the Euler Hermes analyst.

He believes that the rise in oil market prices could slow down.

“Recent misunderstandings that have re-emerged between major oil cartel (OPEC) countries could signal the beginning of the end of pandemic cooperation between participating countries – cooperation that culminated in an up to 50% rise in oil prices since the beginning of the year and a spread over most raw materials,” Chipirliu added.