The European Bank for Reconstruction and Development (EBRD) has significantly improved its estimates on Romania’s economic evolution in 2021, forecasting a 7.2% increase this year, compared to a 6% advance in June, it is shown in a report published on Thursday by the international financial institution.

“Overall, Gross Domestic Product is expected to advance by 7.2% in 2021. In 2022, the Recovery and Resilience Facility would lead to increased investment and a gradual improvement in exports, while a slowdown in private consumption as compared to recent years and the expected fiscal consolidation could translate into a GDP growth of 4.4%. The main risk to this forecast is the evolution of the pandemic, given that Romania has the second lowest vaccination rate in The EU,” the EBRD said.

According to the financial institution, in all three EU Member States in Southeast Europe (Greece, Romania and Bulgaria) there is currently a significant economic recovery after a difficult 2020 year. Especially the economies of Greece and Romania register a particularly strong economic growth, in the case of Romania the main engine of growth being the domestic demand.

However, the EBRD warns that high commodity prices could affect the recovery of economies in its area of activity. “High prices for natural gas, oil and other raw materials affect the trade balance of energy-importing states. Many states are pressured to offset the burden of high energy spending on low-income households. High energy prices, supply chain disruptions and, in in some cases, the depreciation of currencies has significantly increased inflation. This is a cause for concern,” said EBRD chief economist Beata Javorcik.

According to the latest EBRD forecasts, the economies in its area of activity will register an average growth of 5.5% in 2021, an upward revision by 1.3 percentage points compared to the June forecasts. In 2022, as economies recover, the growth rate is expected to slow its pace to 3.8%.