[ad_1]
According to the autumn economic forecasts published by the European Commission (EC), the good results of the economy are due to government investments and construction works.
“The investments surprised with a positive contribution to the growth of the conditions in which the construction activity, for the most part, was not affected by the isolation measures”, it is shown in the document published by the European Commission, it states the Community Executive.
For the coming years, 2021 and 2022, the European Commission estimates that Romania’s economy will gradually recover, registering an advance of 3.3% next year and 3.8% in 2022, however. There is a very high level of uncertainty due to the evolution of the coronavirus pandemic. They estimate that the economy will not return to its pre-crisis level before the end of 2022.
“Prolonged uncertainty about the future direction of public policy in Romania could reduce confidence and limit credit flows, negatively affecting investment and growth. On the other hand, funds allocated to Romania under the Mechanism are expected to recovery and resilience provide additional investment support ”, underlines the European Commission.
The estimates released now are somewhat more optimistic than those of the spring when the European Commission forecast that the Romanian economy will register a contraction of 6% this year.
The budget deficit will increase
According to the document, Romania’s budget deficit is expected to increase significantly, in a context in which the effort required to combat the crisis adds to the past fiscal slippage. According to the latest estimates, Romania’s public deficit is expected to grow to 10.3% of GDP in 2020.
By comparison, in the spring, the EU Executive estimated that Romania will end 2020 with a public deficit of 9.2% of GDP.
“The pre-existing expansionary trend, largely due to the increase in pensions, would be aggravated by the impact of the COVID-19 crisis. Tax revenues will be negatively affected by the recession,” according to specialists from the European Commission.
The EU executive forecasts that Romania’s public deficit will continue to grow in the coming years, reaching 11.3% of GDP in 2021 and 12.5% of GDP in 2022. Consequently, Romania’s debt is expected to increase of 35.3%. % in 2019 to 63.6% in 2022, relative to GDP.
CONTINUATION OF THE ARTICLE ON THE NEXT PAGE
