The package of economic and social measures announced by the Government on April 11 will lead to higher inflation, according to Ciprian Dascalu, chief economist of BCR, speaking to Economedia.ro.

"Higher inflation and more pronounced economic slowdown," would be the effects of the package, he argued.

The measures are in principle adequate, but the structural budget deficit leaves not much room for such measures, he argued.

"In the face of a supply shock, the fiscal response is adequate, but unfortunately, the starting point - the structural deficit before the Covid crisis - has constrained fiscal space for a proper response to the current supply shock caused by the war in Ukraine," Ciprian Dascălu said.

However, the Government never claimed that "Support for Romania" is an economic strategy aimed at fighting inflation or pursuing fiscal consolidation - but a package aimed at addressing urgent problems of households and firms.

The Government announced on April 11 a package of measures worth RON 17.3 bln (EUR 3.4 bln), of which RON 9 bln are European funds and RON 8.3 bln - from the state budget.

Some measures will take effect from May 1, others from June 1, and the deadline is until the end of this year. 

(Photo: Octav Ganea/ Inquam Photos)

andrei@romania-insider.com