Collier reports positive Forecast for CEE – Romania performing well
The Collier report shows that Romania has already finalized its recovery as of first quarter of 2021, when its GDP reached, in real terms, pre-pandemic levels. Of course, the economy is drastically different than how it was a year and a half ago and a lot of things will never be the same – from the way we work to how companies are faring from sector to sector. One of the recurring themes for this recovery is its uneven character, with some sectors barely blinking throughout the last year and a half and others teetering, unsure how long their recovery would last, though it may not come for some.
Investments are a vital component of the recovery, which should support job creation and wages down the road, which in turn drive the GDP, making the overall growth much more sustainable. In fact, in real terms (i.e. at constant prices), capital expenditures stood at post-2008 highs in Q3 2020 and Q1 2021. Meanwhile, exports of goods and services at constant prices are now just some 2% below pre-pandemic highs, after plunging nearly 30% in Q2 2020 versus Q1 2020. On a sectorial basis, the recovery has been quite heterogenous, but most sectors are back in black. It is important to single out manufacturing, construction and certain services (like IT&C) as drivers behind this growth spurt.
The Collier report is moderately optimistic that ongoing investments set in motion by the government will lead to unlocking some growth potential down the road (for instance, even without counting upcoming EU funds, investments in highways have increased several times compared to 2018 or 2019); on the flipside, much more needs to be done in the education sector.