Second, the competitiveness constraints will be maintained, which will affect the exports and with the growing consumption, the net exports will have a negative impact on the economic growth. This will hamper the growth of bank lending, due to both low demand from companies, and limited supply: banks will be cautious to assume risks, including in the context of Basel III implementation. First, the uncertainty that is currently affecting the companies’ decisions to invest will remain at high levels, especially on the background of Parliamentary elections. On the other hand, the GDP deviation will remain negative (the economy will continue to grow under its potential), at least due to two reasons. It is based on the assumption that the agricultural year will be favourable, which will boost the agricultural produce and export capacities, the external budget support will continue to foster public investments, and the household consumption will grow. Hence, in 2017 the economic growth was both slow, less than expected, and not sustainable, which generates many concerns for 2018.įor 2018, we forecast an economic growth of about 4.0% (3.1% according to the pessimistic scenario and 4.8% according to the optimistic scenario). If the influence of these two factors is excluded, as by definition they are temporary due to the low basis of comparison, the economy could be in recession this year. On this background, the economic growth of 2017 was based on a slight revival in consumption as a result of increased remittances after two years of decline, and higher public investments after the external funding was unblocked. The initial GDP growth forecast of 6% did not materialize due to unfavorable weather this spring that undermined the harvest high uncertainty among businesses who were reluctant to resume the crediting, private investments and industrial activity and the slow pace of reforms: about half of the actions stated in the Roadmap as priority reforms of the Government and Parliament were not implemented. The economic year of 2017 fell short of expectations: Gross Domestic Product felt under the pessimistic scenario of our forecast made early in the year (3.0% – 4.0%).