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AHK: the budget implementation shows the drop in the consumer trust towards the evolution of the country
The implementation of the general consolidated budget for January 2017 shows a drop in the trust of the consumer towards the general evolution of Romania stated for Mediafax Dragos Anastasiu, the chairman of the Romanian -German Chamber of Commerce and Industry (AHK).
The implementation of the budget for January 2017 shows a drop of the income with approximately 6% (almost 24% drop at VAT collection) and an increase of expenses with 3.5%. Even so, there was a budgetary excess.
‘If we exclude a possible interruption regarding collection and we suppose that nothing significant has changed with this chapter, our interpretation is the following: besides the drop by 1% of VAT in January 2017 and the elimination of the super-excise for fuel of last year, thing which was felt over the last two months of last year. This in parallel with the growth of the income of the population which led to increase in the area of social contributions and income tax. A possible cause of this type of behaviour may have to do with the degree of trust of the consumer against the general evolution of Romania’ stated Dragos Anastasiu, chairman of the Romanian-German Chamber of Commerce and Industry.
The Romanian-German Chamber of Commerce drew the attention that an increase of the minimum salary at the level of the economy and in general, of the salaries without any direct relation with productivity and without taking into consideration the important differences between the regions of the country will lead not only to the imbalance of the state budget on short term but to significant disadvantages of the Romanian economy and, especially, of some geographical and economic areas disadvantaged on short and long term. On the other hand, a budgetary deficit for a long period of time can have negative effects in the future for Romania and on the international financial markets.
Anastasiu considers that, the implementation of the budget for January 2017 does not do anything else but to strengthen the worry that the national budget will have massive difficulties in reaching the deficit target under 3% and if this happen the whole economy and the Romanian citizens will have to suffer.
The European Commission showed in the country report 2017 when referring to Romania that, inversing the consolidation trend, the fiscal policy became pro-cyclic in 2016 and the public deficit is growing. Thus, under the effect of significant reductions of taxes and expansion of the expenses, the public deficit will gowth to 3.6% in 2017 and 3.9% in 2018.
Even so, the ministry of finances sent on Tuesday a letter to Brussels through which they assure the community executive that our country will not surpass the deficit target.
‘It is necessary that the level of trust of the Romanian investors, as well as foreigners and the population, namely consumers increase significantly as what was lost in the first two months to be recovered until the end of the year. One of the necessary keys to reach this objective is that the fight against corruption and tax evasion continue in an accelerated way and without any doubt, and for this the political class and the business environment as well as the citizens be in agreement’ said the chairman of the Romanian-German Chamber of Commerce and Industry.