OBG’s Regional Editor, Paulius Kuncinas, said a slowdown to 5 percent of economic growth, due to lower consumption, would lower the risk of overheating. However, Oxford Business Group’s forecast is significantly lower than the official prognosis of the Romanian authorities of 6.5 percent.

OBG’s outlook on business environment attractiveness is likewise lacking in optimism. Although Romania became the main regional destination for foreign direct investments in the past few years, their level could be lower this year, as a result of international market turmoil. However, “if developed European developed and the U.S. go into recession, foreign investors could turn to Romania, considered a safe country,” Kuncinas added.

Oxford Business Group’s report also raises concerns about high budget deficit. Salary rises this year, also a general and local election year, and an increase in lending could all push the deficit above the 3 percent of GDP threshold allowed by the European Commission. The prognosis of Romanian authorities for the budget deficit is 2.7 percent of GDP.

OBG experts say a tougher fiscal policy is needed to limit consumer demand and stop a widening of the current account deficit.