The fairly optimistic forecasts in the beginning of the year regarding the economic growth in Romania and the CEE have been suddenly affected by the Russia-Ukraine conflict and the staggering rise in inflation. The European Commission has issued a more tempered-down Spring Forecast in which Romania’s GDP is expected to record a 2.6% growth by the end of the year (-1.6% from their initial estimation in February) and a 3.6% expansion in 2023 (0.9% lower than the growth projected in their Winter Forecast). lnflation projections from the EC, of 8. 9% for 2022 and 5.1 % for 2023, while still high, are however milder than the ones from the National Bank of Romania, which expects a 12.7% rise in inflation for the end of this year and a 6.7% one for year end 2023.
With Central and Eastern Europe being the area most affected by the ongoing war, similar inflation rates were recorded in June all throughout the CEE (12.6% in Hungary, 16.6% in the Czech Republic, 14.2% in Poland, 14.8% in Bulgaria and 15.1% in Romania). Yet, the forecasts regarding the economic growth of other CEE countries have not been revised downward, the main reason for Romania’s decline in the GDP growth estimate being the set of social policies recently implemented by the Government.
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