Economic growth hasn’t made Romanians richer

Romanians’ wealth has stagnated in the last five years although the country posted the fastest economic growth in the EU, a Bloomberg article points out. “Despite gross domestic product rocketing as the government splurges on higher public-sector salaries and cuts taxes, the Balkan country’s wealth – calculated as citizens’ net assets as a share of disposable income – remains about the same as it was five years ago,” reads the Bloomberg piece. Few Romanians have been investing in long-term assets while most people have been spending more on day-to-day items as well as holidays of televisions. Moreover, many Romanians have even increased their indebtedness and have started spending more even before the Government’s promises of higher wages started to materialize. “Citizens haven’t accumulated wealth in recent years – they increased indebtedness based on positive expectations,” Florian Libocor, an economist at BRD-Group Societe Generale told Bloomberg. He thinks that a correction is inevitable at one point. This correction may be getting nearer as Romania’s economy is expected to slow down its growth pace this year while the inflation rate is increasing also pushing interest rates higher. Bloomberg: EU’s fastest growth rate masks deepest level of deprivation Romania’s “blistering” growth story reaches New York Times front page editor@romania-insider.com