Garanti Bank estimates a 3.7 per cent GDP increase in 2016

2016-06-15 21:57:03 - From the Print Edition

Garanti Bank, one of the most innovative and dynamic banks on the local market, estimates a robust growth of Gross Domestic Product (GDP) this year, of 3.7 per cent, due to buoyant consumption, according to the latest Quarterly Macroeconomic Report, corresponding to the first quarter of 2016, quoted by a press release issued to The Diplomat – Bucharest. The bank foresees that the main drivers of the economy in 2016 will continue to be trade and IT&C, while the real estate sector's contribution in GDP could further intensify. The residential market is just facing the start of a new cycle, whereas the rapidly growing service sector will increase demand for office spaces, according to the aforementioned report. The state budget revealed in the first two months of the year a budget surplus of 0.8 billion RON. The VAT cut on food products from 24 per cent to nine per cent implemented in 2015, the general VAT cut from 24 per cent to 20 per cent as of 1 January, as well as the 25 per cent increase of wages in public healthcare will continue to show their effects on the budget execution this year. The budget deficit nonetheless will remain under three per cent of GDP, according to the bank's Macroeconomic Report. "2016 has started under good auspices," said Ufuk Tandogan, CEO of Garanti Bank Romania, according to the press release. "Trade is high, some service sectors such as the IT and outsourcing are booming and real estate has started to show clear signs of rebound. As such, we can only expect this year to follow the positive outlook and see the local economy continue its progress."