Nastase contradicts Isarescu's estimates

Newly-appointed Premier Adrian Nastase yesterday contradicted the current Prime Minister Mugur Isarescu on economic indicators for 2001, promising at the same time a decrease in taxes levied on salaries and profit, and a boost of net profit reinvestment.

At the end of last week, Isarescu stated that next year economic growth would stand at 5% and inflation at 25%.

“By our government programme we want to approach sensible problems of Romanian economy. In the domain of fiscal policy, we will adopt measures aimed at helping part of the underground economy make it to the surface.

At the same time, we want to cut salary and profit taxes and boost net profit reinvestment,” said the PDSR designated Premier, without providing further details.

Nastase has “serious doubts” concerning the 2001 forecasts made by the current Prime Minister, following “the credibility of the prognoses made by Mugur Isarescu for the current year.”

As an argument, he specified that the inflation rate estimated by Isarescu for the current year was of 27% but in fact it reached a 40% level.

As to the estimated economic growth of 5% for next year, the future head of the Executive says that these figures are “oversized, overestimated.”

In Nastase’s opinion, only those measures derived from normative documents approved at the end of the Isarescu mandate can have influences of over 1% of the GDP for next year.

Adrian Nastase added that the premises for next year’s budget would be known after the parametres for 2000 are made public.

According to the evaluations made by the current Executive for the 2001 budget draft, Romania might register economic growth of 5% next year based on exports but especially on investments.

Calculated inflation might stand at 25% and the average exchange rate at 28,000 lei for one dollar, which means that at the end of 2001 the exchange rate might reach a 32,000 lei/dollar ratio. The estimated unemployment rate might stand below 10%.

The Gross Domestic Product is calculated at 1,000,000 billion lei, 36 billion dollars respectively. This year, GDP will amount to around 725,000 billion lei.

Consolidated budget deficit stands at 3.9% of the GDP, while the state budget deficit amounts to 3.8% of the GDP.