“In 2019, just like in the previous years, consumption will be the main determining factor for the economic growth. We believe that investment will not contribute to Romania’s GDP this year either, because there is no investment potential”, Bucsa also said.
Fiscal uncertainty will continue to hinder massive investments, in the private sector, while budget revisions in the public sector will trigger a decline in investments and financings through European Union funds. Bucsa thinks the current fiscal policy represents the biggest risk for Romania’s economic stability. Bucsa drew attention to big and “unsustainable” increases in salaries and pensions.
Romania’s ties with the EU are also subject to risks that could trigger lower EU fund allocations, the marginalization of the state and the lack of “any influence in future decisions”.
Bucsa pointed out there still is the risk of a technical recession in Romania, in the second half of 2019 or the beginning of 2020; “technical recession means two consecutive quarters of GDP decline”. “Our forecasts show an economic slowdown in 2020, very close to 2%. An enhanced infrastructure would have the largest positive impact on Romania’s GDP. A minimum infrastructure connecting the main economic corridors could add roughly 0.5% to the economic growth, probably for nearly a decade”, Bucsa added.