World Bank: Romania’s GDP to grow by 4% this year

Romania’s GDP will grow by 4% this year, supported by the expansionary fiscal policy and the reforms on the labor market, according to the World Bank. However, Romania runs the risk of reaching an excessive deficit due to the revision of the public wage law. The fiscal measures implemented this year, as well as the wage increases in the public sector, will boost consumption. The low inflation and the relaxed monetary policy will help lending. The inflation will remain in a negative territory until June this year and could gradually grow to 1.4% by the end of the year. The budget deficit will significantly grow this year and next year heading towards 3%. "In the absence of tax policy changes that seem unlikely in an election year, the government will have to limit running costs, reduce investments, and improve tax collection to avoid re-entering the excessive deficit procedure," according to the World Bank report. editor@romania-insider.com