Romanian Government, upbeat despite gloomy economic figures

Romanian Government, upbeat despite gloomy economic figures
 

By Daniel Stroe – Bucharest

The Romanian executive has said it maintains its progonosis indicating a 2.5 % economic growth this year, despite recent data showing a dramatic decrease over the second trimester of this year compared to the first three months.

Reacting to numbers which have caught analysts and politicians by surprise, the Romanian Government said the Romanian economy continues its growth trend amid a positive development of industrial production and exports.

„The economic growth in the first semester of 2014, compared to the same period in 2013, is +2.6 %, Romania still having one of the largest economic growth in Europe. Romania continues to have one of the most solid growths in the EU, since a series of measures in the larger package of economy stimulating and job creating measures, sich as reduction of social insurance contribution, have not yet been implemented”the Government reacted in a press release.

It further said economic indicators, such as consumption and exports rose by 8 per cent over the first semester, the unemployment rate remains stable while the inflation stays low. „As a consequence, the Romanian Government maintains its 2.5 % economic growth prognosis for 2014”the text concludes. Moreover, public investments will continue, it added, even though foreign investments have been discouraged by a series of new taxes introduced by the ruling coalition, such as taxes on special constructions.

Romania’s economy went up by 1.4 per cent in the second trimester compared to the same period last year, over the average 1.2 growth registered in the EU, but had an abrupt decrease compared to this year’s first trimester, the most significant among all the communitarian countries, EUROSTAT has announced.

The economy has decreased by 1 per cent in the second trimester compared to the performance registered in the first three months, a conclusion which has caught many by surprise. The opposition asked PM Victor Ponta to explain the downturn and why in the official speech the government relied on a 3.5 % growth while President Traian Basescu warned Ponta’s economic policies risk turning the country back into recession and agreements with IMF being suspended.

Taking into account the progress registered over the last trimester of 2013 and the first three month of 2014, Romania had basically the largest yearly economic growth among all the 28 EU member states.

But despite this, the economic increase slowed down over the second trimester of 2014, going down by 1 per cent compared to the first three months. In comparison, Romania’s neighbors, Hungary and Bulgaria had an economic growth of 0.8 % and, respectively, 0.5 % in the second trimester. Overall, EU registered an economic growth of 0.2 % in the second trimester compared to the first three months.