Romanian finance minister Tanczos Barna, present on Wednesday, May 7, at the Romanian Business Leaders Summit in Bucharest, said that a hard landing (signaling a sharp correction) of the Romanian economy is possible, as a \u201csoft\u201d landing is not very credible, considering the 8.3% budget deficit.\u00a0<\/p>\n
The minister\u2019s comments come after the Romanian stock market saw a flash sale<\/a> after the first round of the presidential elections which brought far-right populist George Simion to first place, with 40% of the votes.\u00a0<\/p>\n \u201cA fiscal reform is needed. If you had asked me a week ago, I would have said that I still saw a possibility for 2025 to end without substantial changes on the revenue side, meaning taxes and levies. Things should be analyzed after the elections by those who will not be interim. But from a fiscal standpoint, things are not as bad as the media sometimes portrays them,\u201d said the minister, cited by Economedia<\/a>.<\/p>\n However, Tanczos Barna stated that a soft correction is not credible, and Romania can no longer avoid a hard landing. The \u201clanding\u201d will depend on the \u201cpilot,\u201d on who is \u201cflying the plane,\u201d he specified. \u201cIf we have stability and we get a government in charge as soon as possible and it starts implementing measures, the landing is manageable. Of course, such a landing always depends on the level you\u2019re landing from. We\u2019re landing from an 8.6% deficit, quite high,\u201d he added.<\/p>\n According to the Finance Minister, capital movements are significant at the moment but can be kept under control. \u201cI\u2019m relying on the closing balance of 2024 from the National Bank, with a very solid situation, a historic reserve, unprecedented preparation in the region, and the stability maintained so far, which can continue to be guaranteed by the BNR,\u201d he said.\u00a0<\/p>\n Tanczos Barna also said that there is enough money in the BNR reserve to support the exchange rate and a buffer to support short- and medium-term expenses. The RON dropped simultaneously with the Bucharest Stock Exchange, as investors exchanged it for more foreign currency.\u00a0<\/p>\n Barna mentioned that a balance can only be created if operations are carried out on both the expenditure and revenue sides, but it\u2019s preferable not to make cuts to investments. As a result, cuts will most likely be seen with operational expenses.\u00a0The minister also cited record revenues in April and the limits placed on spending as reasons for optimism, along with record investments.<\/p>\n