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January 27, 2023

Romanian authorities disagree with EC economic forecast

Finance Minister: We maintain our economic growth forecast at 2.8 pc.

The European Commission’s autumn report on economic growth, inflation and unemployment rate forecasts, a report covering this and the following two years, has stirred a lot of comments. Yesterday we published some details from this report, of course those concerning Romania.
Nevertheless, authorities from several states do not agree with the EC’s forecasts, Romanian authorities being among them.
The Romanian authorities maintain their economic growth forecast at 2.8 per cent for 2014, even though the European Commission’s report has revised downward Romania’s annual economic growth, Public Finance Minister Ioana-Maria Petrescu stated on Thursday on Radio Romania News.  “They (the EC – editor’s note) have made some mistakes, we have made some mistakes too when it comes to forecasts. It’s true that they revised downwards Romania’s annual growth, we maintain our growth forecast at 2.8 per cent, the level it has had until now too. The reasons why I am very confident that this growth will continue to stand at 2.8 per cent are multiple. The latest data we have from the INS show for example that the unemployment rate has fallen during this period, that the net salary income has risen, there are all sorts of indicators that together make us believe that a GDP growth in the third quarter will be higher than that in the second quarter. That’s on the one hand. But, apart from these indicators which show us what is already happening, we have taken several pro-growth economic measures that will show their fruits,” the MFP official pointed out.
In this context, Petrescu mentioned the “First Car” program, a measure meant to encourage consumption, an encouragement of consumption leading to GDP growth, as well as the measure to make reinvested profit exempt from taxation, leading to more private investments, which in turn contribute to GDP growth. Moreover, the lowering of the social insurance contributions by 5 percentage points can lead to more jobs and more investments.
“These measures, together with the trend we are witnessing, make me believe that Romania will register growth in the next quarter and this opinion is somewhat shared by the European Commission too which states that in the third quarter Romania will grow by 1 per cent compared to the second quarter,” the Finance Minister explained.

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