The American Chamber of Commerce in Romania – AmCham Romania considers that the 2021 state budget represents a step ahead towards Romania’s development through investments and fiscal consolidation, noting a series of positive trends, but also certain areas that require increased attention in the implementation of the budget.
“First of all, regarding expenditures, a component on which the business community has always called for an efficient and prudent approach, similar to the private sector practice, we welcome the fact that this is a consolidation budget, by limiting direct expenditures. Also in terms of expenditures, we notice an important increase in allocation for investments, which would double compared to the pre-pandemic years to an unprecedented level for Romania. The investments are intended for infrastructure, health and education, areas that AmCham Romania considers essential, and which we believe could have benefited from additional allocations. We hope that these targets will be enabled by increasing the administrative capacity for their execution, a chapter in which Romania has significant potential for improvement,” the organization said in a release.
Secondly, regarding revenues, AmCham Romania considers that increasing the collection rate remains a promise made by many governments, yet to be fulfilled, which “leads us to believe that the government that will achieve this performance will remain in Romania’s economic history.”
Overall, AmCham Romania welcomes the start of fiscal consolidation, but at the same time voices its belief that more courageous measures are needed to limit the structural deficit for 2022 – 2024, as for the time being it remains well above the midterm objective, both by reducing expenditures and by increasing the collection rate of fiscal revenues and a major improvement of the EU funds absorption.
“We trust that a coherent state budget, reflecting the economic realities and addressing the current challenges, correlated with a well-designed National Recovery and Resilience Plan, will be defining for the way Romania will use the window of opportunity 2021 – 2023, until the next elections, to achieve structural reforms, maintain macroeconomic balance and capitalize on opportunities to reposition the Romanian economy in the global value chain,” the release states in conclusion.