Romania’s gross domestic product rose 4.3% on the year in real terms in the first quarter of the year, fueled by domestic consumption.
Romania posted a budget deficit of 0.1% of the GDP in the first five months, versus a 0.9% budget surplus in the same period a year before, due to the implementation of the new fiscal regulations (VAT rate cut) and the wage increase for public sector workers.
According to Garanti Bank macroeconomic report, the country’s budget deficit could be at risk of exceeding 3% of GDP in 2017 on the backdrop of new measures to be adopted in 2016, such as the 5% wage hike for the public sector employees as of August 1.
“The European economic environment is undergoing important changes. Nevertheless, Romania’s economy has managed to keep its positive trend and a budget deficit below the forecasted level, as well as the dynamism of certain sectors such as IT, trade, and transport,” Garanti Bank Romania CEO, Ufuk Tandoğan, stated.