Romania sees record economic growth rate
Romania has an above-expectations economic growth, its GDP seeing a 1.6% growth in real terms in the second quarter of the year compared to the first quarter.
Corina Cristea, 17.08.2017, 12:34
Exceeding all expectations, Romania has seen a record growth rate in the April to June period, the highest in the European Union. The 5.7% figure mentioned by Eurostat reflects the positive trend in the first quarter of the year, while the overall economic growth rate in the first six months of the year being almost 6% higher compared with the same period last year.
Figures also show that, compared with the first quarter, in the second, Romania’s economy grew by 1.6%, which makes it the second highest growth rate in the European Union after Sweden, whose economy grew by 1.7% from one quarter to the next. The growth of the Romanian economy is also higher than the EU and eurozone average.
The figures published by Eurostat are similar to those announced earlier by the National Institute for Statistics in Bucharest. The country’s economy has thus grown for the 8th consecutive quarter. Analysts say the economic growth seen recently is largely based on consumption, but that industrial activity has also seen positive dynamics. Andrei Radulescu, an economic expert and the chief economist of a large bank in Romania has explained in an interview on Radio Romania:
Andrei Radulescu: “Consumption has been boosted by recent salary increases on the one hand, and on the low level of financing costs and the dynamics of lending in the national currency, on the other. However, we also note a weaker contribution of investments to the dynamics of the economy in the first six months of the year.”
In the medium-run, Andrei Radulescu expects an accumulation of risks to financial macro-stability resulting in particular from the deterioration of the international competitiveness of the Romanian economy and the high level of the budget deficit, which should not be higher than 3% of the GDP.
According to Prime Minister Mihai Tudose, the results confirm that Romania is on a positive trend. Ludovic Orban, the leader of the Liberal Party, the main opposition party in Romania, says, however, that the current Social Democratic government is compromising the country’s medium and long run chances for development.
He says the government shows amateurism and improvisation, proposing laws that destroy investments, the economic initiative and the movement of money. He cited as an example the fact that after the uncertainty about the turnover tax, the solidarity tax, the nationalisation of the second pillar of pensions and the household tax, the government now wants to reintroduce an excise on fuel to patch up the state budget.
