Economics
Romania Urged to Replace Consumer-Led Economic Growth Model
- EBRD says government understands what’s needed and will act
- Infrastructure, EU cohesion funds require attention, bank says
Automobile headlights illuminate a road in the late evening light, as traffic moves towards the University roundabout in the center of Bucharest, Romania.
Photographer: Chris Ratcliffe/Bloomberg
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Romania must adopt a different economic model if it’s to avoid a crisis stemming from the consumer-led boom it’s currently undergoing, according to the European Bank for Reconstruction and Development.
Having supercharged growth by cutting taxes and boosting public-sector pay, the government should now set it on a more sustainable path, said Matteo Patrone, a regional director at the London-based lender. Officials can do this by boosting infrastructure investments and improving the rate at which European Union development cash is absorbed, he said.