In Romania, the Buzzing Economy is Unable to Attenuate the Uproar Caused by Economic Backslides

Barbu Cristian - Marian ()
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Barbu Cristian - Marian: „ARTIFEX†University of Bucharest

Ovidius University Annals, Economic Sciences Series, 2017, vol. XVII, issue 2, 150-155

Abstract: The aim of this article is to show that Romania has ended the second quarter of 2017 with a deficit of 4.1 percent, the highest in the European Union, according to seasonally corrected variations, which were published on Tuesday, October 24, 2017, by Eurostat. Even though Romania has experienced one of the greatest economic growths in the EU, there is an equally rapid growth in the structural deficit and these two trends are not compatible. Romania's economy could face problems in the near future, given the fact that the current development is largely due to consumption and the government is forced to massively cut off investment budgets, in order to sustain the announced wage increases. One should also note the high risk of pro-cyclicality in both fiscal and revenue policy, coupled with an unfavourable structure of budgetary expenditure, which are likely to boost primarily consumer demand and to increase both aggregate demand surplus and the current account deficit.

Keywords: budget implementation; current account; household consumption; economic growth; global competitiveness (search for similar items in EconPapers)
JEL-codes: E03 E60 H30 H60 O11 (search for similar items in EconPapers)
Date: 2017
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Persistent link: https://EconPapers.repec.org/RePEc:ovi:oviste:v:xvii:y:2017:i:2:p:150-155

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