Romania’s budget deficit will reach the limit agreed with the EU (3% of the GDP) this year and will exceed it next year, said Romania’s National Bank governor Mugur Isarescu.

The country will record a deficit of almost 4% of the GDP in 2017, which will endanger its economic stability.

“In 25 years, I have never seen bigger dangers on Romania’s economic and financial stability. Although we have seen an increase in the minimum wage, it is true that the good macroeconomic situation doesn’t reflect at a population and company level,” Isarescu said in a conference organized by Profit.ro.

He said that Romania should use the economic growth period to build up reserves, not spend more. A higher deficit will bring the public debt on an upward trend, in a period of positive economic growth, when the country should consider paying a part of its debt, the BNR governor said.

“We run the risk of losing a few of the progresses made in the last years,” he added.

However, he acknowledged that Romania also needed infrastructure that would increase its economic potential and take create more investment opportunities in the entire country, not only in its western region.

“After all these years, we still don’t have a highway to cross the Carpathians or a complete ring road around Bucharest,” he pointed out.

Romanian central bank governor: We need to keep macroeconomic stability

editor@romania-insider.com

(Photo source: BNR on Twitter)