Daniel Daianu : We think risks are upwards for the inflation this year

Risks are upwards for the inflation this year, as the situation is very, very unsettled in Europe and the news that comes is not comforting, stated on Wednesday the chairman of the Fiscal Council, Daniel Daianu, in a debate.‘We think that risks are upwards for the inflation this year. The risks are high, as the situation is very, very troubling in Europe and the news that comes is not comforting (…).The economic recovery is accompanied by an inflationist peak for who knows how long, how persistent as there are hiccups in the production chains, there is a crisis of electricity supply which is very painful in our economy as well, as the foreign shock was associated with the deregulation of the domestic market which has a damaging effect on many businesses, on the citizens, especially on those with modest income. That is why even at the level of the EU there is an attempt to establish common measures for the European Union to help us survive this winter. I also said that we need to gain some time. This is the big tip for the months to come, to gain time, so that we get bigger stocks, to see what resources we can benefit from, so that we better face everything, as the need to combat the negative impact of the climatic changes makes us change radically the way in which we get electricity, which are the resources we consume – and this means a change in relative prices, so there will be a shock for long term which will be felt more acutely, especially in the countries in the Union where the citizens have modest income’ Daniel Daianu said, during the event ‘ Romania Economic Forum’.‘As regards the economic recovery, it is happening and it has amazed everybody with the figures even in Romania. We consider, at the Fiscal Council, that this year we can register a boost of the economy which might mean at the end of the year, as compared to the previous one, a growth of GDP around 7%, but it will be an uneven recovery, with much suffering – the state will have to support, nothing similar to 2020, when the business environment, the people’s lives in general were affected by lockdown but there will be support this year as well’ Daniel Daianu added.According to his opinion, Romania’s issue from the point of view of the sustainability of the public finances was not that of stocks, but flow, namely, ‘we had a structural ante-pandemics deficit, the highest in the EU – we had a primary deficit of the public budget, so that one recorded before the service of the public debt, among the highest, if not the highest in the EU’.    ‘This situation has prevented the public intervention in the economy for support. It was normal to try and be careful even under the conditions of pandemics, but if we are not careful and we do not manage this budgetary consolidation, be it in four years, or in several years, we will not manage to stabilise the public debt, we will be on a very dangerous road’ Daniel Daianu said. The National Bank of Romania increased at 5.6% the estimate for inflation for the end of this year and at 3.4% for the end of next year. Against the previous estimate, the estimate for the end of this year is upwards by 1.5 percentage points, and that for the end of year is higher by 0.4 percentage point.