Romania’s economy will record an increase of 4.4 percent in 2017 compared to an increase of 3.7 percent which was forecasted in January, the World Bank estimated on Monday in the report regarding Global Economic Prospects.
Moreover, the international financial institution revised upwards by 0.3 percent the estimations for 2018 and 2019, when Romania’s GDP is to increase by 3.7 percent and 3.5 percent respectively.
While the fiscal relaxation will contribute less to Romania’s economic growth, it will put pressure on public and external deficits, the report published on Monday by the World Bank reveals.
Romania will fulfill this year the budget deficit target of 3 percent of the GDP and it’s possible that the economic growth can exceed the official estimation of 5.2 percent, supported by the increases of salaries and tax cuts, Minister of Public Finance Viorel Stefan stated last month in an interview for Reuters.
In Q1 of 2017, Romania had the fastest growth rate of the European Union, namely 5.7 percent, due to the increase of consumption, and at the end of April the budget recorded a slight surplus.
Viorel Stefan explained that the budget might record a surplus at the end of Q1, which means that the deficit target of 3 percent of the GDP for the entire year will be surely fulfilled.
“The growth rate of Q1 is generally slower than in other quarters. So the data makes us optimistic that the GDP growth in 2017 will be higher than 5.2 percent. Our governing programme includes structural reforms, measures to boost production in several sectors that will gradually shift the growth engines of economy from consumption to production, ” the Minister of Public Finance stated.