Ionut Dumitru (Raiffeisen Bank Romania): The fiscal revolution is a crazy thing that nobody understood yet

The fiscal revolution is a crazy thing that nobody understood yet and we all are confused, but no one from the Government can explain why it has been done, said this Tuesday Ionut Dumitru, chef-economist Raiffeisen Bank Romania, within AHK meeting, according to Agerpres.

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“Basically all this crazy thing about the fiscal revolution has sharply deteriorated the consumer behavior, because they are worried about their financial level. Other worrying factors have been the rapid increase in the inflation and ROBOR increase. We still have factors that stimulate consumption. The salaries increases in the public sector will be pretty high in the following period, which means that the consumption dynamics will be alert,” said Dumitru.

He also mentioned that the economic increase in Romania is at the level before crisis, supported by consumption mainly.

“ We are close to the economic increase level before crisis, but it’s important to understand if it’s indeed an increase that we can support. The details show that we have an economic increase based mainly on consumption. In the third quarter of 2017 we had an increase in the private consumption close to 13 percent in real terms. You have to be out unrealistic not to worry about the economic increase sustainability. Over 80 percent of the economic increase was generated probably by consumption, while the in 2016 all the economic growth was generated by consumption. At the same time, the investments have increased just a little in the last years, it was even a drop close to 4 percent in 2016, on a very high economic growth. The salaries increase very fast. This is what concerns the business people, because the productivity doesn’t keep up with the salaries. Last year the productivity increased pretty well in the industry by around 6 percent, but by doubling the salaries, I think the competitiveness issues are obvious. At the same time, the number of employees is growing both in public, as well as in private sectors,” said Dumitru.

AHK Romania organized this Tuesday the first monthly meeting of its members this year, in which were discussed the Romania’s economic development and the Romanian perspectives.