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Ghizdeanu (CNP): At least 3-4 elements show economic growth; we are getting close to 5%
The increase of investments over consumption, the export rate which exceeds imports and confidence indicators are elements proving the sustainability of economic growth in Romania, which can get close to 5% this year, says Ion Ghizdeanu, the president of the National Prognosis Commission.
“There have been fears that we could be on the eve of another 2009 year. We are not because there are several structural elements which I would like to point out for their sustainable character. Firstly we should not forget that the Fiscal Code includes measures for investments and businesses, although Fiscal Code measures discussed a lot are those concerning VAT,” Ghizdeanu explained.
According to him, the 6% increase in the second quarter shows at least 3-4 sustainability elements. The first one is investment dynamics of 10%, which was higher than consumption, especially in the case of private investments.
Moreover, Ghizdeanu says that imports for consumption have dropped in the last two months, while the dynamics of exports was higher than that of imports, also thanks to the private sector.
The third element was confidence. Any other confidence indicator from Romania or the European Commission shows that the confidence of business in Romania is one of the highest in Europe, according to the CNP president.
Ghizdeanu points out that this confidence in seen in the evolution of jobs, considering that in the private sector the number of jobs has grown by 4%. If there are no future prospects, I do not think a business man would engage in increasing his staff, Ghizdeanu explained.
In his opinion, these elements prove the fact that economic advance is sustainable and could get closer to 5% this year. On average term, all calculations lead to the 4% threshold which will maintain for several years.
The National Prognosis Commission has reviewed its estimates about advance of economic advance to 4.8%. In spring the institution indicated a 4.2% increase of GDP.
For the next three years, NPC maintains prognosis on GDP advance at 4.3%, 4.5% and 4.7%. On the other hand the institution has published estimates about the evolution of Romanian economy in 2020, indicating a 4.2% advance.Per capita GDP will constantly grow in the next four years, from 8,581 euros (35,928 lei) in 2016 to 10,587 euros (46,795 lei) in 2019.
Domestic demand will slow down in the following years, from 6.8% in 2016 to 5.2% in 2017, 5.1% in 2018, 5.2% in 2019 and 4.8% in 2020. The same tendency will manifest in the case of final household consumption, which will slow down to 4.1% in 2020 from 7.7% this year.
The preliminary autumn prognosis estimates growing investments in each of the following three years. So, in 2016 the gross capital shaping will increase by 5.3%, in 2017 by 6.8%, in 2018 by 7.1% and in 2019 by 7.5%.
In the economic provisions published in early May by the European Commission, the community executive estimates that Romanian economy will record a 4.2% increase in 2016, backed by robust domestic demand, while in 2017 the increase rate will slow down to 3.7%.