EBRD downgrades Romania's economic growth forecast in 2020

The European Bank for Reconstruction and Development (EBRD) has downgraded its estimates of Romania's economic developments in 2020 as a result of the crisis caused by the coronavirus pandemic, according to a report published on Wednesday by the bank.

According to the latest EBRD forecasts, the Romanian economy would decline 4% this year instead of advancing 3.2%, as forecasted by the bank in November 2019. In 2021, the EBRD expects a 4% expansion of Romania's GDP.

The European Commission has also lowered its estimates of the Romanian economy this year and predicted that Romania will record a significant decrease of 6%, after several years of robust growth, while the government deficit is expected to reach 9.2% of GDP this year. According to the spring economic forecasts published on May 6 by the European Commission for 2021, Romania's economy will recover, even if not at the pre-crisis level, thanks to an expected advance of 4.2%.

In its turn, the International Monetary Fund (IMF) has revised down significantly its estimates of the Romanian economy this year amidst the ongoing coronavirus pandemic, shows IMF's latest report "World Economic Outlook" published in mid-April.

In October 2019, the IMF estimated that Romania will record an economic advance of 3.5% in 2020, but according to the new forecasts the Romanian economy should contract by 5% in 2020 and recover in 2021, when it should advance 3.9%.

The IMF's new estimates are much more pessimistic than those of the World Bank, which, a week earlier, forecast that Romania will grow by 0.3% in 2020, down from a 3.8%-raise forecast three months previously. The World Bank is also betting on a recovery of up to 4.4% in 2021.