The wage increases in Romania’s public sector as well as the country’s negative inflation should prompt households to spend more in the coming quarters, according to Erste Group Research analysts.

Private consumption “is likely to remain a key driver of the country's GDP growth”, reads the Erste Group report. This is mainly due to the 7% annual increase in salaries, the double-digit growth of consumer credit and a steady increase in the number of employees, reports Economica.net.

In 2016, Romania’s economy could grow by 3-4% per year in every quarter, according to Erste analysts.

The state budget posted a surplus of RON 6.1 billion (EUR 1.4 bln) after the first nine months of the year, but the surplus is a result of the low level of state investment. However, investments financed through local public funds and EU funds continued to recover, reads the Erste report.

Public expenditure could rise significantly in the last quarter of 2015.

editor@romania-insider.com