European Commission presents estimates of GDP growth and other key indicators of the EU’s economic situation in 2021-2023

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By Constantin Radut
The EC’s Winter 2022 Economic Forecast report highlights the narrowing of economic growth gaps over the next two years between the EU’s Western and Eastern economies.
What stands out in 2021 is the strong growth in the CEE countries and a slower recovery in Western Europe, with the exception of France which has a very high economic growth forecast of 7% of GDP.
In the Eastern EU, Croatia will have the highest GDP growth, followed by Hungary and Romania.
It is also worth noting the sharp increase in the inflation rate in 2022 compared to 2021. A phenomenon that is not yet stabilized and without reliable forecasts
The table below shows a substantial slowdown in growth over the next two years, 2022 and 2023 in all EEC states.

Winter 2022 Economic Forecast for CEE countries

Country 2021 2022 2023
Bulgaria

-GDP growth (%, yoy)

-Inflation (%, yoy)

 

 

3,8

2,4

 

4,1

2,9

 

3,5

1,8

Croatia

-GDP growth (%, yoy)

-Inflation (%, yoy)

 

10,5

2,7

 

4,8

3,5

 

3,0

1,6

Czechia

-GDP growth (%, yoy)

-Inflation (%, yoy)

 

3,3

3,3

 

4,4

5,8

 

3,9

2,2

Hungary

-GDP growth (%, yoy)

-Inflation (%, yoy)

 

 

6,5

5,2

 

5,0

5,4

 

3,2

3,6

Poland

-GDP growth (%, yoy)

-Inflation (%, yoy)

 

5,7

5,2

 

5,5

6,8

 

4,2

3,8

Romania

-GDP growth (%, yoy)

-Inflation (%, yoy)

 

6,3

4,1

 

4,2

5,3

 

4,5

2,5

Slovakia

-GDP growth (%, yoy)

-Inflation (%, yoy)

 

3,0

2,8

 

5,0

6,4

 

5,1

2,4

 

 

Regarding Romania, the economy registered an advance of 6.3% in 2021, due to a solid domestic demand, but the growth rate will slow down to 4.2% this year, so that in 2023 it will accelerate slightly to 4, 5%.
In comparison, in the autumn of last year, the Community Executive predicted that Romania’s Gross Domestic Product will register an advance of 7% in 2021, following that in 2022 it will slow down to 5.1% and in 2023 it will increase to 5.2%.
“Towards the end of 2021, the advance of growth has calmed down due to supply constraints, the new wave of COVID-19 infections and the sharp recovery of inflation. Despite this loss of momentum, which would continue in the spring of 2022, The latest data on confidence in the economy show a positive outlook for growth, albeit a moderate one, especially in services, retail, construction and industry, “the European Commission said.
According to the EU executive, private consumption is expected to recover in the second half of this year, when restrictions are expected to ease and inflation to moderate. Investments would also remain strong throughout the forecast period, supported by the Recovery and Resilience Facility.

On the other hand, the European Commission has significantly increased its inflation forecast for this year in the case of Romania, from 4% as estimated in November, to 5.3% according to winter estimates, after in 2021 the average inflation rate in Romania it was 4.1%, according to the EU Executive.
“Prices will continue to rise in 2022 due to high energy prices and the shift of these costs to the prices of other goods and services. Food prices are also expected to rise as a result of higher prices and higher supply. Stronger wage dynamics than expected at present represent an upside risk to the inflation forecast, “the European Commission said in a statement released on Thursday.
The good news is that in 2023 the Commission forecasts a decrease in the average annual inflation rate in Romania to 2.5%, as energy prices would moderate and a base effect will appear.

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