Romania's Government builds 2019 budget on 5.5% GDP growth scenario

Romania's economy will grow by 5.5% in 2019 and the general Government budget deficit as a percentage of the gross domestic product (GDP) will be "much smaller than it was in 2018", finance minister Eugen Teodorovici stated, commenting on the 2019 budget planning. This year's budget deficit target is set at nearly 3.0% of GDP. Fiscal consolidation is a commitment that Romania made to the European Commission, Teodorovici stated. The robust growth will be driven by investments, he explained. The budget draft will not be unveiled this week, the finance minister added but he was not able to tell whether the Parliament will vote it before the end of the year or not. Independent analysts consulted by Ziarul Financiar daily expressed skepticism as regards the drivers that could support such robust economic expansion. Romania's GDP growth will decelerate to some 4.3% in 2018, from 7.1% in 2017, and international institutions forecast further cooling next year. "One cannot conclude that the 5.5% growth target is wrong, it's only a forecast. But I do not buy the investment story -- there were not much [public investments] in the past, I don't see why they would be done next year," independent analyst Dragos Cabat said. Next year will be tough not only in Romania, but also in Europe. Laurian Lungu, another independent analyst, also questioned the Government's investment-driven growth scenario. He also mentioned the deterioration in the macroeconomic outlook across whole Europe. Romania’s 2019 budget planning remains in limbo editor@romania-insider.com (photo source: Gov.ro)