The economy and the business environment

Intense discussions about Romanias economy were held on Wednesday in Bucharest.

Daniela Budu, 13.06.2019, 13:50

President Klaus Iohannis, who
attended a meeting of the Coalition for the Development of Romania, called on
the government to take measures for the rapid consolidation of public finance
and the collection of budget revenues, given that, as the president put it,
the vulnerabilities are deepening. He said the Social Democrats, the main
party in the ruling coalition, neglected investments in favour of a policy of
short-term effects, something that will cost everyone in the future. The
president also said that confusion was created in the business community by
recent risky and untimely measures. Private investors and employees acutely
feel the need for the modernisation and development of infrastructure, the
president also said, explaining he refers not only to motorways, but everything
that has to do with a modern living standard for the citizens, including
hospitals, schools, railways, airports, energy infrastructure, public utilities
and digital infrastructure.

The accumulation of deficits and
unbalances has had an impact on the economy, whether it’s the labour market,
the budget, the trade deficit or the current account deficit, the president
went on to say. As an example, he said the trade deficit and the current
account deficit put Romania at odds with the other countries in the region,
which have seen a surplus in this regard. We all feel the effects of volatility
and uncertainty when it comes to the exchange rate and the rising prices, so
that Romania has the highest inflation rate in the European Union, Klaus
Iohannis also said. Moreover, the government’s growing appetite for loans has
led to the highest cost of government funding in the European Union, Klaus
Iohannis added.

However, at a debate on this year’s
investments, prime minister Viorica Dancila announced that, according to
statistical figures, Romania had the second biggest economic growth rate in the
European Union in the first quarter of the year, to which all economic sectors
have contributed. She also said that growth is estimated at 5.5% of the GDP for
the entire 2019, given a regular agricultural year and the recovery of the
services and investments sector. Viorica Dancila said the government paid
special attention to investments related to the projects for the development of
Romania both at national and regional and local level. According to the prime
minister, investments play an essential role in the development of a country
through the benefits and results they bring on the labour market, their
multiplication effects at the level of the entire economy and the facilities
they bring to the areas where they are carried out. She added that the
government is considering a number of programmes to stimulate investments and
thus ensure the harmonious development of the country’s regions and benefits to
as many Romanians as possible.