Δισεβδομαδιαία Επισκόπηση 26 Ιανουαρίου – 8 Φεβρουαρίου 2021

The budget deficit hit a record-high of 9.8% of GDP in FY:20 (up 5.2 pps against the FY:19 outcome), highlighting the weak starting point from which Romania entered the COVID-19 crisis

The budget deficit is set to narrow modestly to a still high 7.2% of GDP in FY:21, suggesting the need for further serious fiscal consolidation

The NBR appears to have limited room for further easing in order to bolster the post COVID-19 recovery

Headline inflation eased to a 4-year low of 0.1% y-o-y at end- 2020 from 3.8% at end-2019, due to weaker domestic demand and lower energy prices

Domestic headline inflation is set to rebound in the period ahead, outpacing that of the euro area

Credit expansion lost steam in 2020 (up 4.5% y-o-y at end-year against 7.4% at end-2019), amid high uncertainty and rising credit risk

The deposit base continued to expand at a solid pace during the pandemic (up 10.2% y-o-y at end-2020)