AmCham Romania: Achieving investment plan, not priority this year either

Achieving the investment plan is not a priority this year either, according to the budget execution for the first 9 months, and a sustainable, long term economic growth cannot be accomplished without a real commitment for investments and structural reforms, a press release sent by AmCham Romania to AGERPRES on Tuesday informs. 

The difference between the too optimistic budget revenues and the growing expenses for salaries and social assistance is working against the accomplishment of the budgeted investment plan for 2018. The analysis of the budget execution for the first 9 months of 2018 shows that achieving the investment plan is not a priority this year either, the quoted source highlights. 

According to the representatives of the US investors in Romania, the budget deficit is 16.8 billion lei (1.77 of the GDP), registered during the first nine months, surpasses by more than twice the deficit level registered during the same period of 2017. Moreover, the fact that 2017 ended with a deficit of 2.88 percent, very close to the maximum of 3 percent of the GDP level provided for in the Maastricht Treaty, confirms the concerns regarding the risks of meeting the budget deficit target in 2018, even if the investment plan for the ongoing year were accomplished, investors are pointing out. 

AmCham Romania says that cutting back on expenses planned for investments remains a control mechanism of the budget deficit, even if restricting these types of allocations has a negative impact on the reals and potential economic growth. 

In the cited document the US investors also talk about the growing danger of an accelerating inflation, in a period of economic expansion, in which Romania is also facing an excess of demand that cannot be covered by the internal offer, as well as a deficit of the available work force. 

As concerns the projections for next year, AmCham Romania regards as optimistic the economic growth targets of 5.7 percent (real terms) and an inflation rate of 2.8 percent, which are considerably different as compared to the estimates of the European Commission - 4.1 percent economic growth and a yearly inflation of 3.4 percent, announced in the Framework-Letter regarding the macroeconomics context, the methodology of elaborating budget projects for the year of 2019.