IMF: Unemployment in Romania to Rise to 5.6% in 2022

The International Monetary Fund (IMF), which reduced its October forecast of 4.8% growth, said Romania’s gross domestic product would increase by only 2.2% in 2022.

Also, the IMF predicts that Romania’s economy will grow by 3.4% in 2023, according to the April 2022 edition (WEO) of the World Economic Outlook report. Not surprisingly, the latest report is called War sets back global recovery.

The current account deficit of Romania is expected to fall to 7% of its GDP by 2022 from 7.1% in 2021. According to the report, the current account gap will shrink to 6.5% in 2023.

The IMF predicts that consumer price inflation in Romania will rise to 9.3% by 2022, predictions confirmed by the current tendency also mentioned by Romania’s National Bank. The IMF predicts that inflation will slow to 4% in 2023.

The unemployment rate in Romania is expected to rise to 5.6% by 2022 from 5.3% in 2021. The unemployment rate in 2023 is likely to fall to 5.5%. Still, this year will be a tough one for companies and employees.

The IMF also stated that it expected the GDP of Emerging and Developing Europe, including Romania, Russia, Turkey, Ukraine, Hungary and Belarus, Bulgaria, and Serbia, to shrink by 2.9% in 2022 and rebound to 1.3% next year.

The war in Ukraine has triggered a costly humanitarian crisis that demands a peaceful resolution. At the same time, economic damage from the conflict will contribute to a significant slowdown in global growth in 2022 and add to inflation. Fuel and food prices have increased rapidly, hitting vulnerable populations in low-income countries hardest.

IMF’s World Economic Outlook report in April

The IMF’s estimates are less optimistic than those of the Romanian government, which sees economic growth of 4.3% in 2022. But the reality slashes down even the most pessimistic expectations now, and the former Romanian PM Florin Citu even mentioned a zero growth this year.

According to opinion polls, 77% of Romanians expect an economic downturn this year. That doesn’t mean they’re ready for what’s coming, though, and Romanians are not used to saving. That means lots of them, especially those losing jobs or having their salaries diminished, will find it challenging to pay bank loans or rents.

Either way, Romanian politicians say that a big crisis is coming. The important thing is to actually do something to prevent the consequences and help those in need, including the entrepreneurs struggling to keep jobs.

The unemployment benefit in Romania is less than 100 USD a month and is offered for a maximum of 12 months.