Coface estimates GDP growth of 3.3 pc in 2015 for Romania, due to lower tax evasion

Romania will register this year a slight improvement in economic activity and a moderate growth of 3.3%, according to country risk analysis on Romania, conducted by Coface.
It also estimates an average annual inflation of 0.3% and a raise in public debt to 39% this year.
According to the source, support policies will lead to economic growth, while the decrease in tax evasion will influence positively the Romanian economy.
“In 2015, domestic demand will be stimulated by tax easing, due to the reduction in social security contributions, by the VAT cut from 24% to 9% for foodstuff as of June 2015, and by the revaluation of pensions and wages in the public sector,” Coface informs.
Coface points out that BNR will maintain the monetary policy rate at a low level, while inflation will remain below the target of 2.5%, which could further reduce the obligatory reserves requirements.
An improvement of the Romanian economy will depend on the decrease of tax evasion which is linked to the underground economy, estimated at 30% of GDP and on the better management of public companies, often generating losses, Coface says. In 2014, there was a decrease in insolvencies, by 27.9% as compared to 2013. However, the rate of insolvencies in Romania, of 4.5%, remains the highest in the CEE region. The average insolvencies in the region are of 1.1%.

BNRcentral bankCofaceeconomic growthinsolvenciesmonetary policy ratetax evasionVATwages
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