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February 26, 2021
ECONOMY FINANCE&BANKING

FinMin Citu: To ensure rapid recovery of economy it’s necessary the fiscal, monetary policies work together

Investments had a positive contribution to the economic growth of 0.4 percentage points in the second quarter, and the net median nominal wage has increased in July by 8.1 pct, over July 2019, yet, in order to maintain rhythm and to ensure a rapid recovery of the economy, it’s necessary that the fiscal and monetary policies work together, states the Minister of Finance, Florin Citu.

“Good news from the economy, in the context of the biggest economic crisis in the last hundred years. In the second quarter the economy was affected by nearly two months of state of emergency. Still, the investments have a positive contribution to the economic growth of 0.4 percentage points. I don’t believe there are many countries that can show such a performance. The second good item of news, in July the net median nominal wage rose by 8.1 pct over July 2019. This increase of the net income that millions of Romanians benefit from is very important, especially in the context of the global economic crisis. In order to maintain rhythm and to ensure the rapid recovery of the economy it’s necessary that the fiscal and monetary policy work together,” wrote the Finance minister, on Tuesday, on his Facebook page.

Florin Citu emphasized that the fiscal space is limited, but there is room for relaxation on the monetary policy side, both in incomes as well as in minimum mandatory reserves, and the injection of liquidity in the economy up to now functioned perfectly and must be continued.

According to provisional data release on Tuesday by the National Institute of Statistics (INS), Romania’s Q2 GDP was 12.3 percent lower in real terms compared to the first quarter.

Year-over-year, the GDP was 10.5 percent down in the second quarter of the year, both as unadjusted and as seasonally adjusted series. In H1 2020, the GDP was 4.6 percent down from H1 2019 in unadjusted terms and 3.9 percent lower in seasonally adjusted terms.

The estimated GDP for the second quarter of 2020 was 238.502 billion lei at current prices, down 12.3 percent in real terms compared to the first quarter of 2020 and 10.5 percent lower from the second quarter of 2019.

The GDP estimate for the first half of 2020 was 510.496 billion lei at current prices, 3.9 percent lower in real terms compared to the first half of 2019.

Expressed as unadjusted series, the estimated GDP in Q2 2020 was 224.253 billion lei at current prices, down 10.5 percent in real terms compared to Q2 2019.

The estimated GDP in H1 2020 was 440.219 billion lei at current prices, 4.6 percent down YoY in real terms.

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