BNR’s Isarescu points to post-electoral hazards. Governing programme leads to a budgetary construction full of novelties

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The domestic hazards on inflation are related to the post-electoral developments and, especially, to the budget for 2017, which is uncertain for the moment; the governing programme leads to a budgetary construction full of novelties, central bank Governor Mugur Isarescu said on Friday.

“Domestic hazards are related to the post-electoral developments, the ones we see daily while watching TV: discussions, controversies… One issue we are not aware of is the budgetary construction,” Mugur Isarescu said.

However, the BNR Governor has said he hails the statement made by the new Finance Minister regarding keeping the budget deficit within the 3% of GDP limit, which he considers as being a commitment.

Referring to the impact of the measures included in the governing programme on inflation and financial stability, due to higher expenditures, the BNR Governor replied: “We are waiting for the budgetary construction.”

“In order to answer this question, we need to see the way the budget is built. Currently we don’t have it. (…) We are waiting for the budgetary construction. We believe the government will do its best to integrate all issues. The budgetary construction is a tough task, we can’t discuss about it without the figures. The governing programme, read carefully, reveals lots of issues for a budget with lots of novelties,” Isarescu said.

The BNR head stressed the measures already announced are just some of the ones included in the governing programme. “Other decisions will follow… an entire calendar has been announced,” Isarescu also said.

In regard to the 5.5% economic growth envisaged by the new Finance Minister, as average for the next four years (given that BNR has publicly revealed on Friday, in a release issued after announcing the monetary policy rate, that economic growth decelerated from 6% in Q2 2016 to 4.4% in Q3 2016), Isarescu said we must wait for the budget to be able to comment on setting the targets.

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