Allianz (ETR:ALVG) Trade's recent research note forecasted Romania's economic growth to surpass the regional average amidst slow fiscal consolidation. The report projects Romania's GDP growth at +2.8% in 2023, +3.2% in 2024, and +3.6% in 2025, outstripping Central and Eastern Europe excluding Turkey and CIS+. However, it also flags the persistent current account deficit, a byproduct of fiscal stimuli, as a concern.
In their recent visit to Bucharest, IMF officials also highlighted the risk of a balance of payments crisis. The Allianz Trade report mentions the elimination of tax breaks and implementation of turnover taxation for larger low-profit firms as part of Romania's fiscal strategy. Mihai Chipirliu from Allianz Trade provided commentary on this move.
The note also warns about potential increases in loan costs due to the fiscal package and predicts that companies will optimize group structures, restructure lower-value positions, and reduce volumes of certain products. This could lead to regulatory unpredictability, fewer investments, work unit closures, and prohibitive early-stage project costs.
Meanwhile, on Thursday in Abidjan, Kristalina Georgieva spoke ahead of the Marrakech IMF and World Bank meetings. She highlighted a $3.7 trillion global output loss, economic fragmentation, and the fight against inflation. Georgieva identified growth differences across the globe, noting the United States' recovery, China's below-expectation performance, and India and Ivory Coast as bright spots. She called for increased funding for Poverty Reduction and Growth Trust and Resilience and Sustainability Trust.
Despite numerous challenges confronting the global economy, Georgieva foresees a possible "soft landing", aligning with the upcoming World Economic Outlook's slow recovery forecast.
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