The International Monetary Fund expects the Romanian economy to contract by 5% in 2020, a much harsher prediction than its ”sister” organisation, the World Bank, made just last week.
However, the IMF estimates the recession will not last, as the 5% decline will be followed by economic growth of 3.9% in 2021.
Last week, the World Bank cut its forecast for Romania’s economy from 3.8% to 0.3%. Ludovic Orban, the Romanian prime minister, said an economic contraction is already observable and the government analysts expect a decline between 1% and 3%.
The IMF also estimates a powerful spike in unemployment claims. According to the World Economic Outlook report released Tuesday, Romania’s unemployment rate is expected to jump to 10.1% in 2020, from 3.9% last year, before easing to 6% in 2021.
The Labour Ministry data shows that more than 200,000 labour contracts have been terminated since the debut of the COVID-19 outbreak. Additionally, more than 1 million contracts were suspended, as the government promised to cover at least part of the partial unemployment claims. Romania’s economically active population is estimated at around 9 million people.
(Bogdan Neagu, EURACTIV.ro)