IMAS sees 4-5% annual growth

Romania’s economic growth throughout 2004-2007 will range between 4 and 5%, but the possibility of GDP posting lower increase (3.5%) in 2005 or 2006 remains, stated Alin Teodorescu, chairman of the Marketing and Social Analysis Institute (IMAS). He added that, although holding only 30% of production means, the private sector’s contribution to GDP amounted to 70%. Thus, this sector’s productivity is four times higher than the productivity rate of the state-run companies, which own 70% of the fixed assets in the Romanian economy. According to Teodorescu, in order for Romania to gain the functional market status, its private sector needs to control more than 50% of the production means. Teodorescu said that private firms’ contribution to GDP would rise by 1% each year over the next period. This growth pace is likely to speed up to 2% annually in the event the global income taxation system is replaced with a single quota taxation system and a social security contribution cut is operated. He estimated that in the wake of these measures, two million individuals operating in the private sector would be registered as taxpayers. ZF