Romanian Finance Minister Expects Economy Will Recover Quickly in 2H/2020

Citu said the effects of the crisis caused by the coronavirus epidemic will be strongly felt in the second quarter but the economy will start on the path to recovery in the third quarter.

He said resources would be directed at economic sectors with high added value in the next period to help recovery. Citu added the pandemic has not led to major job loss and financial markets were optimistic.

He said Romania’s economic recovery would be supported by the country’s low debt ratio and the fact that the sectors most affected by the crisis were not major contributors to the gross domestic product. He said the biggest risk that would hinder recovery would be a populist growth in spending.

Speaking about a 40% hike in pensions scheduled by law for September, the finance minister said the government will consider several scenarios and the ultimate decision on pensions will be political.

He said RON11 billion was allocated in April to social assistance, which includes pensions.

“Budget expenses, especially in the health sector, are much too high. Things are looking OK right now but are not over the fence yet,” said Citu.

Prime minister Ludovic Orban said Monday evening pensions would be raised this fall but said the growth percentage would be established after an analysis and depending on budget revenue collection.