News.ro event – Macroeconomic perspectives and fiscal of Romania for 2023

Romania is not yet certain that it will avoid an economic crisis in 2023, as it has internal difficulties caused by inflation and depends on a number of factors that it does not fully control, such as external ones related to the energy crisis and the war in Ukraine .

“Half of the European Union will be in recession”, says IMF chief Kristalina Georgieva, who specified that 2023 will be a “difficult” new year for the world economy, and inflation will remain at a high level. As far as Romania is concerned, economists have divided opinions, some believing that there is a possibility of entering a recession in the first part of the year, others opining that it could avoid the recession. The President of the Fiscal Council, Daniel Daianu, claims that Romania can avoid a recession in 2023, but draws attention to the fact that the GDP will grow much less compared to estimates.

On the other hand, an analysis made by the Reuters agency even shows that our country would surpass the economies of other states in the area with the help of European funds, the stability of the currency and foreign investments, but also benefiting from the relocation of some businesses from Russia and Ukraine, because of the war. Thus, Romania, which was one of the poorest European countries, reduced the gap with its neighbors to become the second largest economy in the east of the continent, after Poland, according to Reuters analysts. According to the latest Eurostat data, the GDP per capita expressed in standard purchasing power parity (PPP) in Romania stood at 74% of the EU average in 2021, an increase of 21 percentage points compared to 2010.

The executive assures that there is no question of an economic decline in the next period and is based on a study carried out by experts from Harvard University. The analysis shows that in 10 years our country managed to climb 9 positions, thanks to IT, equipment and vehicle exports. We are preceded by Italy, China and France, but before countries such as Denmark, Holland, Canada or Poland.

In addition, according to the official data of the BNR, the flow of foreign direct investments was 9.4 billion in the first 10 months of 2022 and could be over 11 billion euros for the whole year 2022, almost 2 billion more than the values recorded in year 2008, considered to be the best landmark in this regard. The authorities expect this trend to continue in 2023.

Romania has so far received 6.35 billion euros from the money provided for in the PNRR, although 9 billion should have been needed and it has 29 billion euros available until 2026, but there are still big problems with absorption capacity, delayed reforms and deadlines of signing deferred contracts.

Economic growth for Romania, in 2023, is estimated at 2.6% by the World Bank (after it was 3.2% in the previous estimate from October 2022), at 3.1% by the International Monetary Fund (IMF) and at 1 .8% by the European Commission, which forecasts slower growth for the entire EU (0.3%) or for the states in the region.

The state budget foresees an economic growth of 2.8% for the year 2023. It was built considering a GDP of 1,552.1 billion lei, an average annual inflation of 9.6%, revenues of the consolidated general budget of 539, 6 billion lei, with a share of total revenues in GDP of 34.8%, expenses of the general consolidated budget of 607.9 billion lei.

The public deficit is predicted in nominal value at 68.2 billion lei, down from 80 billion lei in 2022, or 4.4% of GDP in cash and ESA terms, from 5.7% of GDP in 2022, respectively 6.2% GDP in ESA terms. The government claims that, in 2023, investment expenditures will amount to approximately 112.1 billion lei and will represent approximately 7.22% of GDP.

The state budget needs higher effective revenues also following some social measures taken to combat the effects of inflation and the increase in energy prices in order not to increase the deficit, and the politicians from the governing coalition and the Government have also introduced new taxes to bring in money to the budget, in parallel with the implementation of the PNRR and the increase of the budget amounts allocated to investments.

The year 2023 came with higher fees and taxes for some categories of Romanians, entrepreneurs, employees or freelancers. We have a different tax for rents, a new tax scheme for gambling winnings, CASS for income from self-employment and investments and others.

Starting from January 1, 2023, the tax on dividends has risen to 8% and the tax regime for micro-enterprises has changed. There was an increase in VAT for drinks with a lot of sugar, including carbonated ones, from 9% to 19% and a solidarity tax was imposed for the big energy companies.

The minimum wage for the economy increased from 2,550 lei to 3,000 lei gross, also starting on January 1, 2023. Of this salary, 200 lei are non-taxable.

A major problem is the collection of VAT, where Romanian

TOPICS OF DISSCUSION

• Macro perspectives for Romania’s economy – What are the specialists’ estimates for the main indicators?
• What must be done to avoid Romania entering recession. How can the pace of economic development be maintained?
• The new fees and taxes valid from January 1, 2023. Assessment and what other changes are necessary?
• Labor taxation – the decisions taken for 2023 and how the tax burden on labor can be reduced in the future.
• Combating tax evasion. What measures can be taken?

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