The political tensions have further eased through March, but the activity of Romania’s government is still hindered by hardly functional political majority. A conflict within the junior ruling party resulted in the replacement of the deputy-prime minister Daniel Constantin. Politically, Constantin was not a relevant part of the balance within the ruling coalition and his replacement in the government’s structure brings nothing new. But the development show the magnitude of the unrest within the ruling coalition, still led informally by the leader of the Social Democratic Party Liviu Dragnea.
Economically, the fiscal slippage remain the main concern. The government promised to keep the deficit within the 3% of GDP this year, but it goes ahead with a multitude of measures with significant impact on the gap. Eventually, it is not the size of the gap that matters, but the focus of the public spending on public wages,, pensions and social spending at the expense of investments. As a measure of last resort, the government squeezes the state-controlled companies as much as possible, through dividends (even paid in advance) and the recovery of reserves. Transgaz thus has to rely on bank loans for investments after having paid the profit derived last to shareholders (basically, to the state). More clarifications are expected after April 25, when Q1 data will be released and compared to the targets.
To Purchase This Report - Click
Ukraine’s economy is recovering and put in 3%-plus growth in the first quarter -- its best result since the economic collapse. But the economy has not built up the momentum it should have in a ... more
Belarus’s economy continues to make good progress on the back of Russia’s revival.
GDP growth in Belarus in 2018 may exceed 3.5% this year. Belarus needs to make the maximum use of the ... more
Iran’s real GDP growth is forecast to edge down to 4.0% in both 2018 and 2019 after coming in at 4.3% in 2017, according to the latest edition of the World Economic Outlook issued by the ... more