Country Economic Forecasts > Romania

The economic outlook for Romania remains bright despite the collapse of the government in November. Domestic demand continued to drive growth in Q3, with GDP rising 1.4% on the quarter and 3.6% on the year as the upward trend in consumption and investment continued. Buoyant real income growth, underpinned by low or negative inflation and a gradual fall in unemployment, will be supportive of consumption throughout 2016. Tax cuts and increases in public sector wages will give a further boost to disposable incomes. But net exports will continue to be a moderate drag on growth.We still expect GDP growth of 3.7% in 2015, with a further pick-up to 3.9% in 2016 before slowing to about 3% a year in 2017-19. But the risks are on the downside are due to the prospect of fiscal unsustainability after the easing measures now under way, which have been criticized by the IMF and the EC but which are unlikely to be reversed by the new caretaker government ahead of elections in December 2016.