European Commission: Romania’s Economy Expected to Grow by 5.1% in 2021

European Commission revised its projection for the Romanian economy. According to the latest estimation published on Wednesday, May 12, Romania is expected to grow its economy by 5.1% in 2021. Thus, EC improves its forecast published in February, when it saw a growth of only 3.8% for this year.

The estimation is closer to the one published by the IMF, which sees the Romanian economy increasing by 6%, the second performance of this kind in EU, but also to the one issued by S&P, which sees the Romanian economy growing by 5% in 2021 and 2022 yearly.

Yet, the Romanian officials still have to move things towards that direction.

On the one hand, confidence effects and a better than expected progress of projects financed under the Recovery and Resilience Plan (RRP) could provide an extra boost to domestic demand. However, delays in the implementation of the RRP could result in a more muted recovery. The forecast follows the authorities’ backloaded projection on the plan’s implementation, according to which only a limited amount of the grant allocation will be used in 2021 and 2022.

EC report on Romania, May 12, 2021

Precisely, Romania still has to improve chapters from its Recovery and Resilience Plan. The very European Commission is not happy with the way the Romanian Government documented the plan and sent it back to be improved, which is now an ongoing process.