High Economic Growth Rate in Romania
Romania reported the third-highest economic growth rate in the EU in the last quarter of 2015
România Internațional, 09.03.2016, 13:20
The National Statistics Institute has announced that last year Romania had a 3.7% economic growth rate compared to the previous year, with a GDP put at 158 billion euros. Contributing to this growth were all the economic sectors, except for agriculture, forestry and fisheries. According to Eurostat, the European statistics bureau, Romania had the third-highest economic growth rate in the EU in the last quarter of 2015. In an interview to Radio Romania, economic analyst Constantin Rudnitchi said growth had been prompted by consumption, which was 15% higher than in the previous year, thanks to salary raises and lower taxes, especially the VAT. While he believes Romania’s leading position in this respect to be justified and predictable, Rudnitchi nonetheless warns that this type of economic growth is not completely robust, if it carries on.
“The Romanian economy has managed to grow, primarily relying on consumption. Investments were not that important during this period. This is not necessarily the robust growth type, but the problem is that it should not last for a long time and should not be very substantial. We need to pay special attention to how companies are treated. If we have investors with a major impact on the economy, they should not receive privileged treatment, but rather we should make sure that they operate properly in a highly competitive European economy.”
Total investments in the Romanian economy went up last year by over 8% compared to 2014 and reached a rough 16 billion euros. More than 40% of the investments went into trade and services, while investment in agriculture, industry and construction dropped slightly. On the other hand, in Bucharest, the Chamber of Deputies’ Committee on Labour passed a bill under which child rearing benefits could be paid in full up until kids reach 2 years of age, and the 750-euro income ceiling for the payment of such benefits could be scrapped. Deputies argue the bill is necessary if Romania wants to improve its birth rate. Labour Minister Ana Costea said the Government would draw up the secondary legislation for the new law, but that a set of measures agreed jointly with the Committee would be preferable.
“There are no other proposals. The ceiling was originally set in order to ensure some balance and to prevent fraud or discrimination, but given the recent salary increases, it has become restrictive.”
The bill will be sent to the Chamber of Deputies for the final vote, and if passed, it will take effect on July 1.
(Translated by A.M. Popescu)
