Firate economic development in the second quarter: 0.3% compared to the same quarter of last year
For the first 6 months, the growth was 0.3 %, after in the second quarter the Romanian economy removed a tormented 0.3 %.
With an inflation of almost 8% (constantly increasing due to fiscal reform packages), with a public debt of 999 billion lei (the equivalent of 55.8% of the gross domestic product), this increase can be felt as a recession in fact. Technically, the recession is defined as the decrease of GDP for two consecutive quarters.
The combination of low economic growth and high inflation is dangerous, because it reflects the phenomenon of “stagflation”: price increases without sufficient economic development. Stagflation reduces real income, increases poverty and can increase unemployment.
The figure announced on Thursday is not a surprise, both the BNR governor and the macroeconomists estimated that we will have a light growth, if not a recession in the next period.
