Romania’s economy continues to slow down, and the fiscal measures currently being discussed seem to focus mainly on a series of tax increases. These could significantly accelerate the deceleration. A fiscal package whose main elements are a temporary increase in the effective VAT rate by at least 3 percentage points, alongside a reduction in public spending—largely investment-related—would be a viable solution. These are simple measures with immediate impact. This option preserves the fragile growth prospects for this year, bringing the budget deficit to -7.8% of GDP in 2025 (on an ESA basis), a realistic level. Conceptually, any increase in taxes […]