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Economic growth is expected to decelerate in 2023 and 2024, but more modestly over the entire period than was previously anticipated, in the conditions of the robust evolution from the second half of 2022 and the acceleration of the attraction of European funds, including of those related to the Next Generation EU instrument, show the Minutes of the monetary policy meeting of the Board of Directors of the National Bank of Romania (BNR) of May 10, 2023.
According to the source, the main determinant of the GDP advance will probably remain private consumption, but in the conditions of slowing down its growth, especially in 2024, against the background of increased interest rates on loans and deposits of the population, developments on the labor market and the uncertainty generated by the extension the war in Ukraine, only partially offset as an impact by the restoration of the purchasing power of the population, together with the decrease in the inflation rate.
Gross fixed capital formation will also continue to contribute consistently to economic growth, the dynamics of which is expected to decrease significantly in 2023 and increase slightly in 2024, but to remain particularly high from a historical perspective, in the conditions of attracting a significant volume of funds European related to the multiannual financial frameworks and the Next Generation EU program, in an internal and external environment marked by uncertainties and still high costs, as well as tight financial conditions, says the quoted source.
On the other hand, on the net export side, a neutral economic impact is possible in the current year, but a slightly contractionary one in 2024, the members of the BNR Board BNR appreciated, highlighting the relatively more moderate drop in dynamics expected to be recorded by the volume of exports of goods and services in 2023, as well as the likely somewhat more visible re-acceleration of the increase in the volume of imports next year, in correlation with the dynamics of internal absorption and the evolution of external demand.
The current account deficit, expressed as a share of GDP, will probably experience an appreciable correction in the current year, including on the basis of the improvement of the exchange rate and the balance of the balance of primary incomes, but it will be reduced only slightly in 2024, thus remaining well above European standards, the members of the BNR Board have shown on several occasions.AGERPRES
