Tax Increases Could Shadow Romania Private Consumption Recovery

04.21.2011 By Florentina Dragu

Romanian private consumption is set to pick up in the coming period, following sharp reductions in the previous years, but recovery could lag behind due to possible tax increases and higher global prices for oil and food items, according to the draft convergence program for 2011-2014.

Romanian private consumption is set to pick up in the coming period, following sharp reductions in the previous years, but recovery could lag behind due to possible tax increases and higher global prices for oil and food items, according to the draft convergence program for 2011-2014.

"Locally, a prolonged bad weather could hurt farming output and subsequently the supply on the domestic market, which would entail higher imports to cover demand," the government said in the document obtained by MEDIAFAX Thursday.

Additionally, a low absorption of EU funds that translates into fewer investments, together with limited private lending or unforeseen increases of taxes, charges and administered prices can pose "further risks to internal demand," according to the document.

The country's convergence program is subject to annual revisions and will be sent to the European Union pending government approval.