Romania’s Fiscal Council president Daniel Dăianu has dismissed claims that the country is facing an “economic disaster” following the latest macroeconomic data published by the National Institute of Statistics (INS), arguing instead that current trends reflect the cost of fiscal adjustment rather than a structural collapse.

Speaking to Digi24 on May 14, Dăianu said it would be inappropriate to interpret recent GDP contraction and inflation data in alarmist terms, amid rising political tensions over the government’s austerity-oriented fiscal stance.

“We do not want to pay it, but we have to pay it to reduce the budget deficit,” he said, referring to efforts to bring down a deficit he said exceeded 9% of GDP in 2024.

Dăianu argued that Romania is undergoing a necessary correction process after years of expansionary fiscal policy, noting that even in 2024, when the deficit remained elevated, economic growth was below 1% of GDP.

“One cannot maintain the standard of living of Romanian citizens when you have to correct a deficit that was in 2024 higher than 9% of GDP,” he said.

He added that while political disputes over economic policy are expected, the underlying adjustment process is unavoidable and carries short-term costs.

“We do not want to pay it, but we have to pay it,” Dăianu reiterated.

His remarks come amid escalating criticism from the Social Democratic Party (PSD), which has accused acting prime minister Ilie Bolojan of implementing excessively harsh austerity measures in response to fiscal consolidation demands.

Dăianu also addressed recent comments suggesting that inflation was driven primarily by external shocks, including the Middle East conflict. He rejected that interpretation, arguing that domestic policy decisions remain a significant driver of price increases.

“No, inflation is not mainly caused by the war in the Middle East,” he said. “Inflation is also caused by the increase in taxes and duties, by the liberalisation of the electricity tariff.”

Romania has recently reported weaker-than-expected GDP performance alongside persistently high inflation, with policymakers divided over the extent to which current developments reflect cyclical adjustment, policy-driven consolidation, or external shocks.

iulian@romania-insider.com

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