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| A possible economic recovery 23/05/2011 |
| (2011-05-23) |
| Last updated: 2011-05-24 14:36 EET |
Romanian ministers announce the country’s economy is recovering. Finance minister, Gheorghe Ialomitianu, promises that pensions and the salaries of state sector employees will get bigger as of January the 1st, whereas agriculture minister Valeriu Tabara says there are no reasons to worry about significant price hikes for foodstuffs in Romania this year.
Pensions and salaries of state sector employees will higher as of next year says Romanian Finance minister, Gheorghe Ialomitianu, who has underlined that this is possible because state revenues have gone up. State sector employees will thus get back the money they lost following the 25% pay cut in 2010. The finance minister also says higher salaries are possible thanks to an economic growth rate of 1.5-2%.
Gheorghe Ialomitianu:”The Fiscal-Budget Strategy that we have drafted provides for an increase in pensions as of January the 1st 2012. The percentage by which these pensions will grow is substantial, because inflation rate is high in Romania, standing at 8%. We have budget resources for 2012, so we are 100% sure we will be able to increase pensions. We also have good news for state sector employees: we have the possibility to give them back the portion that was cut and wasn’t compensated for in June 2010.”
Ialomitianu has also said that the value of the VAT will remain unchanged, 24%, because the Romanian state can’t afford to reduce it.
Gheorghe Ialomitianu again: “ We can’t afford to renounce budgets that allow us to pay pensions, salaries and to get money for investment. If we reduce the VAT now, we will have less money to the state budget and prices will not decrease. And then we will have to get other loans, which is not advisable. The business circle is not demanding a cut of the VAT, but a more efficient activity, to be carried out by the fiscal administration.”
In another move, The National Federation of Agricultural Producers in Romania has announced that foodstuff prices will go up in the following period of time, because of weather conditions, on the one hand, and because the Agriculture Ministry does not pursue a coherent policy to support this sector, on the other. The National Federation of Agricultural Producers in Romania estimates the rye harvest will be 23% smaller than last year, the rape seed production will be 22% lower, and the oil seed production will decrease by 7.6%.
Vegetable and fruit production will be smaller than expected. In turn, Agriculture Minister Valeriu Tabara says there are no reasons to worry about significant price hikes for foodstuffs this year. He has said prices will remain at the same level, for wheat, meat, fruit and vegetable, because the prices demanded by producers are good. The minister claims prices for foodstuffs have gone up not because of the prices of raw materials, but because of the commissions charged by supermarkets, which have taken prices unreasonably high.
In turn, representatives of traders and shops say they do not increase prices too much and the chains of shops or supermarkets can’t solve the problems in agriculture or the food industry. The agriculture minister has however given assurances that Romania will not face a foodstuff crisis, because it has a huge potential.
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