Romania’s economic growth is more balanced than in previous years, being backed by both exports and consumption and investments, Finance Minister Anca Dragu stated on Tuesday at the Euromoney CEE Forum 2016 conference in Vienna. Romanian authorities are confident in the 2016 budget figures and the domestic resources that could compensate the risk of a potential drop in external demand in 2016, Dragu pointed out.
“For 2016 we estimate a real GDP growth of 4.1 per cent, above the European Union average. Romania’s economic growth is more balanced than it was several years ago. While exports were previously the main engine of growth, we are confident that in 2016 exports, consumption and investments will jointly be engines of growth,” the Finance Minister said.
Asked whether Romania’s economic growth in 2015 stood at 3.7 per cent, Anca Dragu said “at least 3.7 per cent.”
The Finance Minister mentioned the new Fiscal Code, which has come into force this year and which includes significant cuts in important taxes, including the VAT being lowered from 24 to 20 per cent and the dividend tax from 16 to 5 per cent, a very good message for the business sector.
“We are confident that the supplementary financial resources will remain in the Romanian economy in 2016 and will go into investments,” the Finance Minister stated. Anca Dragu emphasized that the authorities were very cautious in the 2016 macroeconomic projections and budget deficit projections (2.95 per cent of GDP based on EU’s ESA methodology, and 2.8 per cent of GDP based on the cash methodology).
In what concerns the risks for 2016, the Finance Ministry official mentioned potentially slower economic growth in the European Union, Romania’s main trade partner, but emphasized that there are internal resources that could allow domestic demand to compensate a potentially lower external demand.
Anca Dragu also added that the Romanian banking system is in a good financial situation, having good liquidity and being well capitalized, and profitability has returned to the local banking system dominated by large European banks. The Finance Minister pointed out that consumption crediting, the auto, IT and light industry have grown.
The Finance Ministry official also talked about Romania’s financing needs in 2016, which stand at RON 70 bln or 9.4 per cent of GDP, pointing out that there will be a balanced approach in what concerns the internal and external market.