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Lucian Croitoru (BNR): Romania has a growth potential of 2-3%

Romania will have a potential for growth of 2-3 percent as soon as the country exits the crisis, compared to 5 percent the country's growth potential before the crisis, adviser to Governor of the National Bank of Romania (BNR), Lucian Croitoru, told a press conference on the vulnerability of the welfare state during the economic crisis, which was held in Bucharest on Monday.

'Before the crisis, Romania had a growth potential of around 5 percent, which because of the crisis dropped down to 2-3 percent, while forcing the growth of the country beyond the real potential of its economy may lead to imbalances. Romania remained poor, dependent on external financing, so that we can not even finance the potential for growth that we still have, unless we receive foreign capital, and we need especially private foreign capital,' said the adviser to BNR Governor, who appreciated that, currently, the capital that does enter Romania is mostly official capital from the large international financiers.

'In order to attract foreign private capital, Romania needs political coherence, in the absence of which it will enter a vicious circle: we won't come to have low deficits unless we develop and we can not grow without the help of the foreign private capital, while the capital won't come until serious efforts are made to increase the country's economic growth potential,' said Croitoru.

According to the adviser to the BNR governor, the politics in Romania should be mainly concerned with bringing the living standards in Romania to the levels in the other EU countries.

A major obstacle to increasing the potential for economic growth and to achieving the fundamental objective of raising the standards of living is what Croitoru called 'infusion of populism' that has characterized recent years in Romania.

'Romania will have chances to grow if it makes adjustments, but the infusion of populism may lead to such a huge resistance to reform, that it will compromise the future of political parties and also the chance of Romanians to better living standards,' said the adviser to the BNR Governor.

According to Lucian Croitoru, the population is not able to require the necessary incentives for economic development because the public debates are dominated by too much 'noise', i.e. there is too little talk about the major goal to increase living standards.

In Romania, we have to ensure now the fiscal sustainability, with the intermediate stages being the increase of economic competitiveness, to lead to international demand for the Romanian products, as well as increasing the potential for economic growth.

In order to increase the potential for economic growth, the government must develop social security policies and reduce unemployment, so as to correctly adjust the taxes on labour and to reform the labour market.

Sursa: http://www.actmedia.eu

Tags: potential romania growth economic capital crisis croitoru lucian bnr

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