The chairman of Romania’s Fiscal Council, Daniel Dăianu, stated Wednesday in Cluj that Romania has been living beyond its means for many years and that the situation would have been even worse had it not been for the recent economic and fiscal measures.
"For many years, Romania has been living beyond its means, which explains why public debt jumped from 39% of GDP in 2019 to around 60% of GDP today. The deficit in 2024 will be very high, exceeding 9% of GDP. So, this was not a sustainable trajectory; the hammer was coming down and would have hit us very hard on the head, causing significant direct and collateral damage, had this correction not begun—a correction that is on the right track, even if it entails suffering. Because a budget deficit adjustment of this magnitude, which does not end this year but will continue beyond 2026, cannot help but affect people’s lives and business operations. It cannot be otherwise! You don’t need much economic knowledge here; you need good faith to understand that you cannot have a better life, unless a miracle occurs—and we do not live in a world of miracles,” said Daniel Dăianu.
He added that a 6.2% deficit this year would be a very good sign for the economy’s recovery.
"I say that if we have a deficit of around 6.2% this year—which is possible and would be very good, not only for our economy but also for how we will be able to continue financing the deficit and refinancing our public debt. Because, as I said, we cannot remain with a deficit of around 6% in the coming years," added Daniel Dăianu.
In this context, he also mentioned the role of the war in Iran on economic developments.
"The second factor is related to the war in the Middle East. It’s very good that we have a two-week ceasefire. It’s very good; it’s a moment of respite and calms the markets. Let’s hope that an agreement will be reached between the parties. It is a factor because inflation was already high in Romania. But there will be disinflation in the second half of the year, despite this severe shock. We will see a surge in inflation and a rise in the relative price of energy. We’ve seen a drop in crude oil prices, but they won’t rebound. In my opinion, there’s no way fuel prices will return to pre-war levels. And one of the reasons is that the energy infrastructure has been destroyed,” Daniel Dăianu added.
On Wednesday, at Babeş-Bolyai University (UBB), he launched his book "Crises and the Authoritarian Temptation."
His book was presented by UBB Rector Prof. Dr. Daniel David, Romania’s former chief negotiator with the European Union, Prof. Dr. Vasile Puşcaş, and the dean of the Faculty of Economics and Business Administration at UBB, Assoc. Prof. Dr. Răzvan Mustaţă.
AGERPRES
