28 Dec 2016

Romanian companies, in need of a highly competent corporate governance

Author: Radu Craciun

A state-of-the-art corporate governance would help Romanian companies utilize, in the most efficient way, the available resources for maximum results.

1. As a macro-economist, you are able to see pros and cons of the record growth that is being registered in Romania in 2016 (in terms of dynamics). Can you summarize them?
Indeed, Romania is likely to post this year a remarkable growth rate, most likely close to 5%. This comes in the context of the pro-cyclical fiscal stimulus which has been provided in 2015 and 2016. As a consequence, this has led to a consumption driven growth mirrored by the high wage growth rates and an acceleration of retail sales. The problem is that without a boost of the potential output due to lagging public investments, the growth acceleration is likely to lose steam and be increasingly reflected in external deficits. Therefore, already as of 2017 we should expect an economic slowdown.


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