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Dumitru (Raiffeisen Bank): Romania has low economic performance mainly for lack of investments
Public investments have been cut in Romania in the last two years, in order to allow higher social expenses, and the major problem concerning investments is uncertainty and lack of predictability, said Ionut Dumitru, the chief economist of Raiffeisen Bank at a specialized conference.
“Compared to other countries, it is clear that Romania has a low performance, mainly because of the lack of investments. Public investments in Romania have been cut in the last two years to allow higher social expenses. The lack of infrastructure is a main break for investments. We spend a little under 3% of GDP for investments in the public sector and we certainly need bigger investments in infrastructure. We see that the major problem in Romania, in point of investments is insecurity, the lack of predictability. There have been several legislative initiatives in past years which came with harsh taxes in the field of telecommunications, energy and other sectors,” Dumitru said.
He added that the question of 9% of GDP representing arrears registered by companies in Romania should be solved because “it is too much for a European country.”
“In Romania many companies have had losses for years. So we must clean up the sector in order to solve the question of arrears. 9% of GDP in the business sector is too much for a European country like Romania. We must make many changes in laws to consolidate payment discipline: the commercial law, law 30/1990, the law on insolvency. We have a high budget constriction and that is not good for the country. The fiscal problem must be solved to make room for investments, because otherwise we cannot hope to have improvements in the public sector,” the chief economist of Raiffeisen Bank said.
The National Bank of Romania and the European Investment Bank organize the press briefing "Investment and Investment Finance in Romania", on Thursday.