Romania’s economy withstood significant adverse shocks in the wake of Russia’s invasion of Ukraine and the ensuing energy crisis. Tackling high inflation is the immediate task for macroeconomic policy. Fiscal consolidation would complement restrictive monetary policy in keeping demand at sustainable levels. Greater tax revenues are needed to stabilise the public debt burden while funding priority spending – including on critical infrastructure, pensions, health care and the education system. Productivity growth is a powerful engine for lifting living standards but sustaining it will require a sound investment climate backed by strong competition, predictable policymaking, financial inclusion and effective controls against corruption.
