“Romania spends enough money on public investment, but there is a lack of correlation between performance and the level of the investments,” said Catalin Pauna, senior economist at World Bank’s office in Romania.
Speaking at a conference organized by Ziarul Financiar, Pauna said Romania must adopt coherent sectorial policies to improve its performance ratio. Additionally, the authorities should take firm steps to improve tax collection rates, the World Bank economist said.
Solving these two key issues could help boost Romania’s growth potential, Pauna said.
The World Bank has maintained its forecast on Romania’s economic growth unchanged at 1.6% in 2013, from an increase of 0.7% in the previous year. The growth will be largely fueled by a modest recovery in domestic demand, as the economic crisis in the euro area is expected to hinder exports.
A good agricultural year could push growth to 0.5 to 0.7 percentage points above forecast, Pauna said. Likewise, further structural reforms would help improve growth levels, he added.
For 2014, the World Bank estimates an economic increase of 2.2%, while medium-term growth is seen at 3% to 4%.