“Increasing productivity is essential for the progress of real convergence, as it allows both faster economic growth and wage raises,” said Isarescu, arguing for a sustainable real and nominal convergence process.
He said the budget deficit was 0.7% of GDP in 2015 but it is expected to near the 3% EU limit in 2016 and 2017, driven by tax cuts the country adopted to stimulate consumption and economic growth, which he said was “forcing a fast real convergence”.
The central bank governor added Romania should be able to resist slipping into adopting populist measures merely for election purposes if it has learned anything from past mistakes.
Romania holds a local election in June and a Parliamentary election later this year.