Romanian FinMin announces "mix of measures" to contain inflation

The Romanian Government will hopefully have prepared by the beginning of March a package of measures aimed at containing inflation to the single-digit area, finance minister Adrian Caciu stated in a press conference on February 11, quoted by News.ro.

By simply prolonging the 'tax and subsidy' scheme now in force, the Government can avoid the 11.2% CPI inflation peak in April and smooth the peak to around 10%, according to estimates of the National Bank of Romania (BNR). The scheme's budget for the five months from November to March will cost the Government RON 6 bln (EUR 1.2 bln).

Minister Caciu hasn't disclosed elements of the anti-inflation package. "There will not be a single type of measures, I can tell this because the measures must address both the causes and the effects," he stated.

Romania may cut the VAT on energy to 5%, and the lowering of labour taxation is envisaged as well, minister Caciu reportedly announced in the same press conference. Notably, News.ro reported that he avoided providing firm confirmation for the special VAT rate for energy.

"Energy VAT could be cut to 5%, lowering labour taxation is considered as well," minister Caciu said, quoted by Adevarul daily, during a conference where he presented several measures to support the Romanian economy.

Prime minister Nicolae Ciuca announced previously that, from April 1, households with monthly consumption of up to 300 kWh will pay a preferential VAT rate of 5%, compared to the 19% standard VAT rate paid now. Along with this measure, PM Ciuca announced that the Government would compensate the cogeneration fees and the green certificates for households.

The idea of ​​reducing labour taxation is new, however.

(Photo source: Inquam Photos/Octav Ganea)