Romania needs a new economic growth model based on innovation and integration in the global values chain in order to accelerate its convergence, the regional director of the European Bank for Reconstruction and Development (EBRD), Matteo Patrone, said at a conference where he has presented ” EBRD Transition Report 2017-18″.
This year’s report focuses on the challenges of sustaining economic growth with a particular reference to middle income countries. Romania is no exception to these issues and from these challenges. GDP is growing beyond potential, based on consumption, fuelled by wage growth without correlation with increasing the country’s productivity, Patrone said, capital.ro informs.
In order to continue and possibly accelerate on the way of convergence, Romania, like many countries in the region, without the difference to which it refers, requires a new model of economic growth based on innovation and integration in the global values chain. It is my conviction that Romania is very well on this path as a result of human capital and cutting edge technology such as ITC, aerospace or automotive. But there are a number of ingredients that lack or should be supported, such as structural reforms. I think infrastructure is a crucial ingredient, Matteo Patrone said.
According to the EBRD official, infrastructure is a crucial factor because it supports social inclusion, geographic integration and increases productivity; it opens the way to trade and foreign direct investments. He added that the needed investments in the region, for infrastructure, will be about 40% of the money needed for investments, i.e. EUR 1,900 billion.
Having a highway network of only 747 km, Romania is behind the countries in the region in terms of network density and geographic expansion.
Matteo Patrone argues that there are sectors where progress has been made, such as water and energy, mentioning the gas network interconnections with Bulgaria and Hungary.