Romania

Economic growth has remained strong, raising people’s incomes towards those in advanced EU countries. However, macroeconomic imbalances have become increasingly evident: the current account and fiscal deficits have been widening and inflation pressures are building. Economic growth is expected to stay above potential in 2019 on the back of continued fiscal stimulus, but slow down over the medium term due to faltering investment and reforms. The growing imbalances are eroding policy room for maneuver and increasing the risk that the convergence with EU could suffer a setback, triggered by domestic policy excesses or swings in global investor sentiment.