Romania Country Report Mar17 - March, 2017

April 4, 2017

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 Here

Related Reports

Russia Country Report Sep18 - September, 2018

Just the threat of new “crushing” US sanctions that may be adopted in the autumn is already hurting the Russian economy in August. The Ministry of Economic development has already revised the ... more

Iran Country Report Sep18 - September, 2018

Iran’s economy expanded by 3.7% during the 2017-2018 Persian calendar year (ended March 20), according to a report released by the Central Bank of Iran (CBI) on June 16. Further revisions of ... more

Belarus Country Report Sep18 - September, 2018

Belarus' economic growth was higher than expected in the first half of this year topping 4.5%, which is almost twice the 2.8% forecast at the start of the year. The government is using the windfall ... more

Dismiss