BR Analysis. Money to spend only on wages and pensions? Romania’s social spending enters danger zone above 60 pct of total budget, limiting room for response in case of economic downturn
Official data released in March show Romania’s GDP, the index widely used to measure the size of national economies, recorded growth of 6.9 percent in 2017 in real terms, the highest since 2008, to reach RON 858.3 billion (EUR 187.9 billion).
Experts point out that much of the economic growth in Romania is the product of a consumer bonanza, stimulated by years of wage-led growth government policy.
But this model has generated high public spending on wages and pensions and larger fiscal and current account deficits.
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