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In Romania, the Buzzing Economy is Unable to Attenuate the Uproar Caused by Economic Backslides

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  • Barbu Cristian - Marian

    („ARTIFEX†University of Bucharest)

Abstract

The aim of this article is to show that Romania has ended the second quarter of 2017 with a deficit of 4.1 percent, the highest in the European Union, according to seasonally corrected variations, which were published on Tuesday, October 24, 2017, by Eurostat. Even though Romania has experienced one of the greatest economic growths in the EU, there is an equally rapid growth in the structural deficit and these two trends are not compatible. Romania's economy could face problems in the near future, given the fact that the current development is largely due to consumption and the government is forced to massively cut off investment budgets, in order to sustain the announced wage increases. One should also note the high risk of pro-cyclicality in both fiscal and revenue policy, coupled with an unfavourable structure of budgetary expenditure, which are likely to boost primarily consumer demand and to increase both aggregate demand surplus and the current account deficit.

Suggested Citation

  • Barbu Cristian - Marian, 2017. "In Romania, the Buzzing Economy is Unable to Attenuate the Uproar Caused by Economic Backslides," Ovidius University Annals, Economic Sciences Series, Ovidius University of Constantza, Faculty of Economic Sciences, vol. 0(2), pages 150-155, December.
    • Handle: RePEc:ovi:oviste:v:xvii:y:2017:i:2:p:150-155
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    More about this item

    Keywords

    budget implementation; current account; household consumption; economic growth; global competitiveness;
    All these keywords.

    JEL classification:

    • E03 - Macroeconomics and Monetary Economics - - General - - - Behavioral Macroeconomics
    • E60 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - General
    • H30 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - General
    • H60 - Public Economics - - National Budget, Deficit, and Debt - - - General
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development

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