Real estate and construction sector managers are downbeat

The managers of Carpatcement Holding and City Mall shopping centre consider wage and pension cuts will shortly be followed by rising taxes, in the context where genuine steps to reboot the economy are yet to be taken. Mihai Agaficioaia, general manager of Bucharest’s City Mall shopping centre believes the move to cut pensions and public sector employees’ wages will solve the budgetary deficit problem only on short term and just “mathematically”, expecting the government to also raise taxes in the following period. “(…) These moves are not correlated with other measures that should counterbalance their effects and for this reason I expect VAT and flat tax to be raised in a very short term, of two-three months,” Agaficioaia says. Mihai Rohan, chairman and general manager of Carpatcement Holding foresees the same scenario, considering the government will have no money to honour the assumed social obligations. “VAT and the flat tax will ultimately come to be raised as the consumption decline, generated by the slashed wages and pensions, will also mean lower sums collected to the budget from VAT and income tax (…) ,” Rohan says.