The National Forecast Commission revises down GDP growth from 4.6% to 4.3% in 2022. The inflation rate at the end of 2022 estimated at 9.5%

By Andra Beltz
The National Commission for Strategy and Forecast (CNSP) revised down the economic growth forecast for this year to 4.3%, compared to 4.6% than previously estimated, given the inflationary shock of the last quarter of last year and the wave 5 of the coronavirus pandemic.
The institution also points out that it has not taken into account the outbreak of a conflict caused by geopolitical tensions on the border with Ukraine.
“Given the evolution of the economy under the impact of the inflation shock of the fourth quarter of 2021, as well as the appearance of the 5th wave of the pandemic, as well as the continuation of the energy crisis, especially in the first part of 2022, an economic advance of 4 is estimated for the current year. 3%, a slightly lower revision compared to the autumn forecast (4.6%) and a rising deflator of 6.1%, correlated with the increase in prices. on the border with Ukraine “, is shown in the Forecast 2021 – 2025, the winter version.
Gross Domestic Product is estimated at 1.315 billion lei current prices this year.
The adjustment of the GDP advance estimate took into account the maintenance of prices for energy products at a high level, which would affect the activity in the industry, especially the chemical and metallurgical, energy-intensive industries, explains CNSP. At the same time, supply chain disruptions are expected to continue, although disruptions may be smaller, but will continue to affect the automotive and electrical equipment industries.
Under these conditions, for the gross value added in industry, CNSP estimates an increase of 4.1% in 2022, decreasing by 0.3 percentage points compared to the version in the autumn forecast.
For the construction sector, given the manifestation of a basic effect determined by the slowdown in activity in the second half of 2021, but also of a sustained impulse from accessing European funds, it was estimated an increase in gross value added of 9.6%, increasing by 0.6 percentage points compared to the autumn forecast.
A more modest increase is also expected on the services side, especially on the component of goods purchases by households. For services as a whole, the downward change in gross value added was 0.3 percentage points.
According to CNSP, final consumption will slow to 3.6% this year, from 5.3% in 2021, and investments (gross fixed capital formation) are expected to increase by 9.1% compared to 5.1 % in the previous year.
At the same time, the impact of the increase in electricity and natural gas prices on the inflation trajectory during the current year was reassessed, which led to an increase in consumer prices. Future developments indicate a slowdown in growth in February due to the entry into force of new regulations on capping levels and consumption quotas, followed by a peak in April. Smaller increases are also expected in July and the beginning of the cold season.
Estimates indicate inflation at the end of 2022 of 9.5%, corresponding to the annual average of 9.9%, and did not take into account other measures to support the population, which will be quantified in the next forecast, the source said.