In the absence of structural reforms and fiscal consolidation, Romania’s buoyant economic growth risks setting the stage for a hard landing, the European Commission wrote at the beginning of its country report on Romania.
The country’s economic boom has been driven mainly by consumption, while investment has remained subdued, according to the EC, which points out that Romania should take the opportunity to rebuild fiscal buffers and prepare the economy for leaner times.
“Inequality and poverty rates remain high despite the strong economic growth. Some structural reforms were reversed in 2017 while others stalled. The progress made in the fight against corruption was again put at risk,” says the report’s executive summary.
“Ensuring continuity of past reforms would support Romania’s transformation to a higher value-added economy and could improve the economy’s resilience to an eventual downturn,” the EC concludes.