Romania’s Macroeconomic Performance in the Region

Cristina Elena Popa
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Cristina Elena Popa: Lucian Blaga University of Sibiu, Romania

Expert Journal of Economics, 2019, vol. 7, issue 2, 91-100

Abstract: From 2014-2018 Romania recorded the fastest growth rate among the CESE-6 countries (Bulgaria, Croatia, Czech Republic, Poland, Romania and Hungary). To achieve this performance, it embraced an economic growth model based on consumption rather than investment. The government’s strategy was to cut indirect taxes, increase public wages and old-age pensions but this generated higher inflation rates and larger budget and current account deficits. Thereby, according to the most recent Convergence Report issued in 2018 by the European Commission, Romania turned out to be the least prepared among the CESE-6 countries to adopt the euro. Reality has shown that an economy that relies too heavily on consumption and neglects investments is more vulnerable and has difficulties in supporting long-term economic growth. In order to improve the performance of its macroeconomic indicators and increase the living standard of the population, Romania must shift the growth model to investment.

JEL-codes: E20 (search for similar items in EconPapers)
Date: 2019
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