In this context, Eurostat appreciates this is the largest annual advance registered by a EU member state.
Romania’s Gross Domestic Product (GDP) advanced 3.8 percent in both unadjusted terms and when adjusted for seasonality in the first quarter of 2014, compared with Q1, 2013, according to flash estimates of the National Statistics Institute (INS) released on Thursday. In real terms, the Q1, 2014 GDP was up 0.1 percent from Q4, 2013 in seasonally adjusted terms. This is the largest annual advance registered by a European Union (EU) member state, according to some preliminary estimates published yesterday by the European office of statistics (Eurostat).
It is the second quarter in a row when Romania has had the largest annual economic growth in the EU after in the last quarter of last year Romania had a 5.1 percent increase in the GDP.
According to Eurostat, in the first quarter of 2014, the European Union registered a 1.4 percent annual economic growth and the Eurozone, a 0.9 percent advance.In exchange, in the first quarter of this year, when compared to the last quarter of 2013, Romania had the lowest economic growth in the EU (0.1 percent), a significant slowdown from the 1.4 percent quarterly growth registered in the past three months of last year. Even so, the Romanian economy registered performances that were superior to the Czech Republic and France, whose economies stagnated in the first three months of this year, whereas the Dutch economy saw a 1.4 percent quarterly contraction.
“Of course, these are just a signal and we will have to wait for the final data, but I think the signal is very positive because it shows our policies so far have been very good; I hope we can maintain this economic growth and keep implementing measures with an emphasis on the business environment,” Public Finance Minister Ioana Petrescu stated Thursday in the conference ‘European Information Days,’ organized by the Department for SMEs and the European Commission (EC).
In late 2013, when the Government built the 2014 national budget, it estimated an economic growth of 2.2 percent for 2014.
Early this May, the EC upwardly adjusted again its estimates of Romania’s economic growth in 2014 and 2015, with the two standing now at 2.5 percent and 2.6 percent, respectively, up from 2.3 percent and 2.5 per cent, respectively, in its winter estimates released in February.
The International Monetary Fund (IMF) is expecting Romania’s economic growth to stand at 2.2 percent and advance 2.5 percent in 2015.
5 pc CAS cut to be discussed in June
On a different topic, Ioana Petrescu, Minister of Public Finance, announced that Romanian authorities will discuss the possibility of cutting back social insurance contributions by 5 percent with international financing institutions this June. She also pointed out that the Gov’t will maintain the 16 percent flat tax for companies, continuing its efforts to promote “incentive measures toward developing high technology.” This summer, the Ministry of Finance plans to issue the draft on rewriting the Fiscal Code and Fiscal Procedure Code. “Another business requirement that plays an important role in earning credibility is rewriting the Fiscal Code and the Fiscal Procedure Code; we expect to submit the corresponding draft for public debate in the coming summer for it to pass the Parliament by the end of the year and go into effect early next year,” Ioana Petrescu said further.
RON 7 bn, anticipated payments for European projects
The Public Finance Ministry (MFP) estimates this year anticipated payments from the Treasury worth RON 7 billion for projects benefiting from European funds, Public Finance Minister Ioana Petrescu said. ‘MFP makes anticipated payments from the Treasury to the European project beneficiaries. We are talking about very big amounts, RON 7 billion worth of payments are estimated only in 2014, RON 4 billion in the first semester and RON 3 billion in the second semester,’ the Finance Minister said. She pointed out that the amounts in question would be subsequently recovered from the EC. Ioana Petrescu maintains that this aspect contributed to the increase in the EU funds absorption rate from 7 per cent in 2012 to 40 percent at present.
Moreover, Ioana Petrescu brought to mind that in the period 2007-2014, Romania was a net fund beneficiary from the European Union, taking into account it collected EUR 24 billion in the aforementioned period and contributed to the EU budget with payments worth EUR 10 billion.