Economic Prospects

The government in Bucharest is looking for solutions to create fresh jobs and keep at home the over one million Romanians who returned from abroad

Daniela Budu, 26.05.2020, 13:50

According
to Romania’s Finance Minister Florin Cîţu, the country’s
economy is going to look a little bit different after this period of
crisis; a lot of companies are going to invest in technology while a
new challenge for the government is to create fresh jobs in order to
keep at home the over one million Romanians who came back home during
the crisis.

In
an interview to a TV channel Cîţu said that new jobs could be
created in the retail sector, which currently needs 10,000 people, as
well as in the industry of hotels, restaurants and cafes. The
minister estimates that a lot of companies are going to invest in
technology and more employees will be needed in these sectors as
well. The corona crisis has created a lot of problems for the
Romanian employees.

According
to the Labour Ministry, over 400 contracts have been terminated in
this period, particularly in the retail, car and bike repair
businesses, as well as in the sectors of processing and construction.
The number of contracts suspended comes close to 600 thousand. On the
other hand, Cîţu announced that the government is also considering
incentives for investors in order to enable them to use their
resources for investment and increase their output capabilities.

At
the same time all the resources Romania has are going to be channeled
towards investment, the Romanian minister has explained adding the
purchasing power will increase as inflation and interest rates are
going down.

‘As
for the inflation, things improved from one month to the other. The
inflation rate went down and is continuing this trend in the coming
period. And the same goes for interest rates, which means the
purchasing power of the Romanians will increase against the lowering
prices and interest rates. We have elements indicating the purchasing
power will definitely increase in the coming period’, the Finance
Minister has explained.

As
for the law on the pension raise starting September 1st,
this creates sustainability issues with the budget for the following
2 years, Florin Cîţu says. Furthermore, international financial
institutions and rating agencies have pointed out that the issue
represents a major risk for the health of the economy.

According
to Cîţu, for this law and for others endorsed by Parliament there
are no funds and measures must be taken to avoid destabilizing the
economy. We recall that last week, the government in Bucharest
announced a partnership with the banks to help jump-starting the
economy, as according to Florin Cîţu, the banks have both the
expertise and the necessary channels to transfer money towards the
economy’s best performing sectors.

(translated
by bill)