Premier Calin Popescu-Tariceanu and vice-premier Gheorghe Pogea yesterday admitted that the main macroeconomic targets set for 2005 were not met. "The economic growth was of only 4.2%-4.5%, the current account deficit reached 9% of GDP and inflation slightly exceeded the National Bank''s target, reaching 8.6%," the vice-premier for economic affairs Gheorghe Pogea said.
The Statistics Institute will publish the final data on economic growth as late as March, so the statements of the governmental officials yesterday were based on their own estimates.
"Things had been pretty clear for a while now; the growth target was expected to be much lower than the official estimates," believes Dragos Paslaru, an analyst with the Applied Economics Group (GEA).
"There was a rebound of the economy, based on consumption, towards the end of the year, which probably pushed the growth pace to above 4% in the fourth quarter, following the level of just 3.6% for the first nine months," the GEA analyst added.
Yet the consumption peak during the winter holiday season meant not only a rebound of the economy but also increased imports. The authorities estimate the current account deficit stood at some 9% of GDP last year compared with the 6.6% estimate in the spring and the 8.1% provided by the National Forecast Commission in the autumn.
"It may have been that imports in the last few months took the current account deficit above 9% and even close to 10% of GDP," Dragos Paslaru said.
As for the economic growth target being missed, the authorities say that the prognosis was not that bold; it was the damage caused by floods that was too serious. "The 6% growth pace reflects the real potential of the economy, but the damage caused by floods affected this forecast," Pogea said.
Despite the economy''s growth below the potential, vice-premier Pogea believes that the glass can also be seen as half-full. "First of all, we''re talking about a modernisation of the economy, because the import of capital goods went up by some 39% last year, and they are the basis of economic growth for the years to come," Pogea stated. The economic growth target for 2006 as published by the National Forecast Commission is 6%. Pogea says the goal is realistic, though it is not easy to achieve. "Economic growth must be based on investments and exports and at the same time limit consumption growth," Pogea says.
The vice-premier says that consumer demand will witness as large a boom as last year, because the population will not have as much available income as it had in 2005, following the introduction of the flat tax. Furthermore, the officials say the RON will not appreciate as much in 2006, which means it will not affect exporters and should thus stimulate the consumption of imported products.
Then there is also the wage policy of the Government, which will be much more prudent. In order to pursue this goal, Pogea is preparing a government decision to constrain wage increases in monitored state-owned enterprises. mihai.bobocea@zf.ro
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