Prime Minister Ilie Bolojan says that he does not know whether or not Romania will enter a recession, explaining that there is an economic contraction, as a result of the measures to correct budget deficits, but also the possibility of an economic recovery this year by keeping investments at a high level.
He answered when asked if Romania would enter a recession.
"I don't know if there will be a recession or not, but we there is certainty. There is no country where measures have been taken to correct budget deficits that do not have an economic contraction effect. Nowhere has there been such a thing. So, inevitably, we have a measure of economic contraction. How long will this contraction be? If it remains at a level where there is minimal growth or if it is an economic decline, that will remain to be seen. But, as I was saying, there is no measure to adjust these deficits without some economic contraction. There is no such thing. The important thing is that the contraction is not long-term, that it is a semester, a quarter or three quarters and then we will see that by what is happening, by decreasing imports, by increasing exports, by decreasing the inflation rate, the other economic indicators takes us to an area where economic adjustments are made and the economy is on a sounder basis," Bolojan told Digi 24 private broadcaster on Monday evening.
He was asked if he is betting on the fact that by the end of the year there will be an economic growth.
"We should recover. I'll tell you why. We can only consume what we can afford. For years we consumed much more than we could afford. We stayed on consumption. The moment you stop pumping a lot of money, the demand obviously decreases. That is a reality. We have also tried to cut our expenses and keep our investments at a high level. That is also true because we have European funds that have helped us quite a lot on this issue. And that's what we'll try to do this year as well. And that is also the maximum challenge. The challenge is twofold, because on the one hand we have to narrow our deficits, therefore, to spend less, but on the other hand we have some very large investments, because it is the year when we have to absorb the European funds under the National Recovery and Resilience Plan (PNRR) programme, and there are over EUR 10 billion that we have to absorb by the end of August," said Bolojan.
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