Deficit and arrears are main budgetary risks

The main medium-term budgetary risks are the increasing current account deficit, arrears, problems with the pension system and the ability to absorb EU funds, according to Romania’s Pre-Accession Economic Programme (PEP), a document the authorities send to the European Commission on a regular basis. “The current account deficit, while not a deep structural imbalance, can create problems in the medium term in terms of external sustainability,” the document says. Although exports did increase at an accelerated pace, especially to EU markets, the pace of growth in imports, and in particular of consumer goods, remained worryingly high, reflecting the strong growth in aggregate demand. ZF