“The political crisis, on top of the economic crisis, has complicated matters. It is essential that the period of governmental uncertainty end as quickly as possible. There are decisions to be made without delay. Romania needs a government to implement reforms,” Berglof told Business Standard.
Ending the period of governmental uncertainty and forming a new Cabinet, “whichever this is,” is essential for the cooperation with international institutions, the official added. “The governmental uncertainty is not helping efforts to meet the budget deficit, inflation, and exchange rate targets,” Berglof said.
EBRD estimates an eight percent decline in gross domestic product (GDP) in Romania in 2009, a 5.3 percent inflation rate, and a budget deficit of 7.3 percent of GDP. In terms of challenges, EBRD economists mentioned attracting new capital, reducing rigidity on the labour market, implementing reforms in the justice sector, and the application of legislation.
