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Eastern Europe News

Romanian Economy Roaring

The Romanian government expects economic growth of 5.2% for 2017, after growing the fastest in the European economic block for the first five months of the year. Finance Minister Viorel Stefan also declared the former communist country will continue to cut taxes even further to further stimulate the economy and raise wages for its citizens.

“We will certainly introduce from January 2018 the fiscal relaxation measures mentioned in the governing programme,” Stefan said in an interview for the Reuters Central & Eastern Europe Investment Summit. “Taxation levels will fall,” reported Reuters.

The European Union is not happy with Romania’s tax cut plans but Stefan said government would meet its 3% of GDP deficit goal for the year. The current tax rate is 16% but there are calls from the governing Social Democrat Party to reduce the level to 10%.

The European Commission estimates Romania will run the EU’s largest deficit ratios this year and next, at 3.5 percent and 3.7 percent of GDP respectively, reported Reuters.

“We are talking about convergence and joining the euro, but we forget that these don’t mean just meeting nominal criteria, but also mean investment, raising household income, infrastructure that is compatible with the European one and regions in the country that are equal in development.”

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