Romania Warned of High Trade Deficit

Romania’s central bank governor has sounded a number of warning notes about the country’s apparently booming economy, including the risk of a yawning trade deficit, Eurasiareview reported. Mugur Isarescu sounded a cautionary note about the country’s economy, despite the optimistic growth forecasts coming out of the European Commission among others. Romania faces the risk of running a high trade deficit in 2017, unless the government postpones investment and cuts taxes, he said. Isarescu also said that inflation is also due to rise from 1.9% earlier this year to 2.7% by the end of the year, due to increased imports and production costs and low exports. Romania’s currency reached its lowest exchange rate with the euro in five years on Wednesday, due to the high trade deficit. Another problem creating tension in the economy is the lack of correlation between wage hikes and productivity, he added. Romania has a lack of highly skilled workers and too many unskilled workers, he added.