Back to crisis? Consumption goes up in Romania, investments halt

Romania’s economic growth is mainly based on consumption, whereas investments are suffering, said Ionut Dumitru, Fiscal Council president. The state spends increasingly less money for infrastructure projects. This could lead to a situation similar to the one before the crisis, when the economy overheated and then dissipated. In 2008, the GDP rose by 8%, whereas in the next year, the economy fell into a deep recession, with a negative rate of 7%. Back then, the consumption had annual growth rates of 10-12% and the economy rose by 6-8%, whereas now consumption goes up by 5% and the economy increases by about 3%, Dumitru explained, reports local Profit.ro. The wage increases in the public and private sector, as well as the higher lending, feed consumption. The lending in national currency has an annual growth rate of 25%, he said. editor@romania-insider.com