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Romania’s Macroeconomic Performance in the Region

Author

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  • Cristina Elena POPA

    (Lucian Blaga University of Sibiu, Romania)

Abstract

From 2014-2018 Romania recorded the fastest growth rate among the CESE-6 countries (Bulgaria, Croatia, Czech Republic, Poland, Romania and Hungary). To achieve this performance, it embraced an economic growth model based on consumption rather than investment. The government’s strategy was to cut indirect taxes, increase public wages and old-age pensions but this generated higher inflation rates and larger budget and current account deficits. Thereby, according to the most recent Convergence Report issued in 2018 by the European Commission, Romania turned out to be the least prepared among the CESE-6 countries to adopt the euro. Reality has shown that an economy that relies too heavily on consumption and neglects investments is more vulnerable and has difficulties in supporting long-term economic growth. In order to improve the performance of its macroeconomic indicators and increase the living standard of the population, Romania must shift the growth model to investment.

Suggested Citation

  • Cristina Elena POPA, 2019. "Romania’s Macroeconomic Performance in the Region," Expert Journal of Economics, Sprint Investify, vol. 7(2), pages 91-100.
    • Handle: RePEc:exp:econcs:v:7:y:2019:i:2:p:91-100
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    References listed on IDEAS

    as
    1. Camelia MORARU, 2013. "Foreign direct investment and economic growth in Romania," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania - AGER, vol. 0(5(582)), pages 125-134, May.
    2. repec:agr:journl:v:5(582):y:2013:i:5(582):p:125-134 is not listed on IDEAS
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    More about this item

    JEL classification:

    • E20 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - General (includes Measurement and Data)

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