Romania adjusted its current account deficit from 4.5% of gross domestic product in 2009 to 0.5% in 2014.
“The external deficit was significantly adjusted in recent years but it will widen again and we’ll have trouble financing it,” Lazea warned.
“Romania has been through several cycles in the past 10-15 years: there was 2004-2008 when growth was based almost exclusively on domestic consumption, the the crisis hit, then in 2008-2014 growth was driven by exports. Now people seem to have forgotten all about that and consumption is encouraged again. I understand that manufacturers want double-digit growth in consumption at any cost. Consumers themselves, tired of recession, wants consumption to grow and the political factor responds by raising consumption. But the question remains whether this is good for the country in the long run,” Lazea said at a conference Wednesday.
“We need to think this through and be careful what we wish for because we might get it. Consumption accounts for more than 70% of GDP and it would be unnatural to say we don’t want growth in consumption, but it’s a matter of nuance and fine-tuning,” he concluded.