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Official Daianu on economic growth: Figures must be contextualized
The the economic growth of 6.5pct posted by the National Institute of Statistics (INS) for the first half of the year, and that of 13pct posted for the second quarter must be contextualized, head of the Fiscal Council Daniel Daianu told Agerpres, underscoring that we also need to consider the increase in the current account deficit and the need to correct the public budget before drawing the final conclusions.
"We need to understand that economic growth needs to be robust. We are looking at economic growth, but let's also look at growing external imbalances. Such growth rates are not sustainable. They are not sustainable even in developed economies that have a balanced external balance during such economic comebacks, big rebounds after the forced economic declines of 2020. It is inappropriate to say normalization, but you have unsustainable economic growth against the fundamental factors. Many economies will have lower growth rates than in 2021, in the years to come. And in our case, it is important to point out that we have a structural budget deficit and large external deficits, this combination is against us and needs to be corrected. So we need to consider this increase in the first half and the second quarter against the basic effect (we had lockdown in the first part of last year), against the external deficits and a larger structural budget deficit. This show that we shouldn't brag and we shouldn't forget that we have a major macroeconomic correction ahead of us. This year the budget deficit will be lower, it would be good to have it below 7pct of the GDP, even if the rectification target is 7.13pct. Also, we must not look at the figures for the second quarter alone. We should also consider the external balance, the external imbalances. The figure is 7pct of GDP for the entire year, but it is accompanied by an increase in the current account deficit and it must be correlated to the absolutely necessary correction of the budget deficit. We must contextualize all these figures," Daniel Daianu explained.