The COVID-19 pandemic had a strong negative impact
on the global economy throughout 2020, with a 6.4%
yoy drop in GDP in the EU-27 area. Relatively, Romania’s
GDP decreased by 3.9%. The lockdown period as well
as the restrictive measures instated by the Government
have led to the negative contribution to GDP growth of
important economic sectors such as agriculture, industry
and hospitality.
With a 6.6% share of GDP, the construction sector
seemed not only to survive the unprecedented conditions
but to also thrive in 2020, being one of the few sectors
with a positive contribution (0.8%) to the GDP growth.
Consumer prices have registered smaller raises in 2020
compared to previous years, as expected, mainly due
to the effects of the health crisis. However, 2021 is
expected to register a higher inflation rate, with significant
price increases, especially for energy and fuel.
The lockdown period and the subsequent social
distancing measures have put severe pressure on certain
industries, the most affected being the hospitality
industry. Despite efforts to retain their employees, the
closing down of hotels and restaurants has led to a
significant number of layoffs in this sector.
The pressure has had a spill effect into a drop in the
average net salaries for industries like hospitality and air
transportation, which have registered a decrease in the
average salary of 12.9% and 28.38% respectively. While
some raises were registered in sectors like healthcare and
energy, on average, the net salary remained roughly the
same in 2020 compared to the previous year.
The National Bank’s initiative to ease the monetary policy
has led to a decrease in the interbank rate several times
throughout 2020. The year ended with a 2.03% level for
3M ROBOR index, from 3.18% in December 2019.
According to the European Commission’s forecast for
the following 12 months, Romania’s GDP is expected
to register a 3.8% growth in 2021. With a high level
of uncertainty still surrounding the global and local
economies, the growth is strongly dependent on the
efficiency of vaccination programs and other sanitary
measures meant to solve the current crisis. EU
intervention framework as well as national policies will
be crucial in insuring a smooth rebound of the economy.
However, according to market participants, a complete
recovery is not likely to happen by 2022, provided that
the health crisis will be kept under control.
