Romania’s economic growth of 4% is reaching the limit of its current economic potential. Stimulating consumption on a large scale through massive tax cuts endangers the macroeconomic equilibrium, said Mugur Isarescu, Central Bank Governor.

The Romanian economy has already received in the last two years several incentives, such as the VAT cut on bread, and later on all food items, or the cut in the social contributions.

“We need to analyze if the economic growth depends not only on stimulating the demand, but also the supply,” he added, cited by local Mediafax.

The increase in the GDP depends on jobs, productivity increase, which also depend on investments, innovation and workforce qualification, said Isarescu.

editor@romania-insider.com