Romania: 2017 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Romania
IMF Staff Country Reports, May 25, 2017
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- Romania: 2017 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Romania
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Bibliographic details
- Published: May 25, 2017
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9781484301579.002
Overview
- Highlights Romania’s strong economic growth in 2016, resulting in a closed output gap.
- Private consumption was boosted by an expansionary and procyclical fiscal policy and wage increases.
- There has been welcome progress in reducing banking sector nonperforming loans.
Fiscal stance and demand
- The cyclically adjusted budget deficit grew by 1.5 percent of GDP in 2016.
- The increase in the cyclically adjusted deficit reflected large tax rate cuts and wage increases.
- Private consumption expansion was driven by the above fiscal policy and higher wages.
Inflation developments
- Headline inflation remained subdued owing to:
- indirect tax cuts,
- administrative price adjustments, and
- low euro area inflation and oil prices.
Banking sector
- Noted progress in reducing nonperforming loans in the banking sector.
Growth outlook and projections
- Growth is expected to reach 4.2 percent in 2017.
- Growth is expected to moderate to 3.5 percent in the medium term.
Content in this bundle
- Country Report