Romania might register in 2017 an economic growth slowdown to 3.6% from the 2016 estimate of 5%, and a budget deficit of 3.3% based on the ESA methodology, said Maximilien Lambertson, analyst with The economist Intelligence Unit (EIU) for Agerpres.
„We expect for the GDP growth to slow down from an estimated increase of 5% in 2016 to 3.6% in 2017. PSD will pursue an „anti-austerity” program, which would involve further tax cuts, increase of wages in the public sector and rise of national minimum wage. In 2017 we estimate a budget deficit equivalent to 3.1% of GDP based on the national methodology (3.3% based on the ESA 2010 methodology), which exceeds the EU threshold,” said the EIU analyst.
These estimations will be reached „as a result of the increasing budget expenditure, the declining revenues and the slowdown of the economic growth below the Government’s forecast: we expect a slowdown in the economic growth rate (3.6%) compared to the Government’s estimate (5.2%) in 2017”, added Maximilien Lambertson.
The analyst says, according to Agerpres, he does not expect that the recent decision of amending the criminal law to have a significant impact on the economy, even though the government legitimacy received a „serious hit”.
„If they promote the amendment of the criminal law as a bill that will only stimulate the opposition. The partners of PSD in the coalition, the liberal democrats from ALDE and the Hungarians from UDMR will be worried about the rapid erosion of the government legitimacy. PSD would conclude that trying to force amending the Criminal Code risks to trigger further protests,” says Maximilien Lambertson.
The Government has drafted the 2017 budget based on an estimated economic growth of 5.2%, announced at the last minute by the National Prognosis Commission, which previously estimated a growth rate of 4.8%.
On the other hand, the estimates of foreign institutions are lower.
The European Commission estimates an economic growth of 3.9% in 2017 and a budget deficit of 3.2%, according to its autumn forecast.
The International Monetary Fund has forecasted a growth of 3.8%.
Erste Group limits its estimation at a GDP growth of 4.3% in 2017 and 2.8% in 2018 and Berenberg at 4.4%.
Important fact: it is noteworthy that the Government has drafted the 2017 budget based on an economic growth of 5.2%.