Cutting taxes is no longer possible. Romania has already the smallest budget in EU, BCR official warns

There is no room for tax cuts in Romania, given that the country already has the smallest budget of the European Union, Radu Craciun, general manager BCR Pensii stated on Thursday in a press conference. According to him, although 2017 looks good from a macroeconomic perspective, history demonstrates that we have record numbers growth and record numbers of recession, says.

“We are in an unstoppable process for lowering taxes. But this is no longer possible. (…) As a country, we can not continue endlessly to decrease budget revenues,” Radu Craciun, explained.

BCR official pointed out that, no matter what percentage of GDP is allocated for some domains, such as Defense, the amounts are insufficient given the declining budget revenues. In this context, the economist launched an appeal to businesses community to say stop to tax cuts, because a further decrease of budget revenues will affect the operating costs of companies, workforce, the time spent with goods transport a.s.o.

He also warns that the decision makers should not limit to 2017 when it’s analyzed the macroeconomic situation in Romania. It’s important to look the dynamic, at least for the years 2018 and 2019.

Moreover, BCR Pensii head claims that the authorities boost the economy once again through fiscal policy authorities, which already grows sustainably, leading to a record rise in Europe, but “we are preparing to have a record deficit in Europe”.

On the other hand, the economist argues that, in this period, the external risks hanging over Romania are not economical, but geopolitical.