Anticipates US Tariffs to Reduce Romania's GDP by 0.3%, According to Erste Bank
A fresh take on Erste Bank's tariff-tweaked forecasts
In the wake of US president Donald Trump's tariff announcements, Austria's Erste Bank group has crunched some numbers and updated their economic growth forecasts for the Central and Eastern European (CEE) countries, including Romania. Let's unfold their revised expectations!
Before the tariff announcement, Erste Bank had anticipated Central and Eastern European economies to clock in a growth rate of 2% to 3.8% for 2025. However, the revision following the tariffs is a marginal change, decreasing the potential growth by up to 0.3 percentage points, depending on the country.
The initial projection for 2026 was set at a growth rate of 1.9% to 4.3% for the CEE region. For Romania, the growth rate is now expected to be 3.1%, which is a notch lower than the previous forecast.
Erste Bank analysts have developed two scenarios based on the tariffs: a baseline and an adverse one. In the rosier baseline scenario, tariffs would fall from 20% to 10% by the end of this year. In the gloomier adverse scenario, the tariffs would persist at 20% permanently.
When the tariffs do fall to 10%, the cumulative impact on the CEE region remains between -0.3 to -0.2 percentage points. The negative impact on Romania's GDP would be approximately 0.15 percentage points. On the other hand, in the adverse scenario, the cumulative negative impact is the most pronounced in Slovakia and Hungary, while Croatia and Romania would likely experience the least impact directly from the US import tariffs.
In the adverse scenario, if tariffs remain at 20%, the cumulative direct impact on Romania's GDP would hover only under 0.4 percentage points. In conclusion, Romania may need to brace itself for some minor, granular changes in growth rates according to Erste Bank's revised forecasts. So, grab a cuppa, pull up a chair, and keep your eyes on these economic shifts!
(Written by iulian@our website - Check out his insights on worldwide economics! Photo credit: Ifeelstock/Dreamstime.com)
- Erste Bank's revised forecast for Romania's growth rate in 2025, considering the tariffs, is now expected to be slightly below the initial 2% to 3.8%, at 3.1%.
- In the adverse scenario where tariffs persist at 20%, Romania may experience a direct impact on its GDP of approximately 0.4 percentage points.
- The durability of the economic impact of the tariffs on the sector, particularly in Romania's industry and finance, remains a subject of interest and ongoing analysis by financial institutions like Erste Bank.
