The effects of fiscal policies on economic growth in Romania

• Author: Ialomitianu R.G., Danu A.L., Bucoi A.
• Pages: 291-300

Bulletin of the Transilvania University of Braşov

Series V: Economic Sciences • Vol. 9 (58) No. 2 - 2016

The effects of fiscal policies on the economic growth

in Romania

Răzvan Gheorghe IALOMIŢIANU1, Aurelian Leonard DANU2,

Alexandru BUCOI 3

Abstract: This paper intends to examine the results of fiscal policy implementation in

Romania, their impact on economic growth and how fiscal policies have influenced the

growth of budgetary deficits. Our objective is to highlight and explore efficient fiscal

consolidation strategies that can ensure a stable economic growth through sustainable

public finances. The methodology consists in analysing the information provided by national

and international financial institutions, comparing it to past, proposed and assumed values,

and examining the efforts and results. The conclusion we reached was that, in order to

restore the sustainability of public finances, the need arises for considerable fiscal

consolidation effort, as well as for deep structural reforms, with a view to creating

favourable conditions for sustainable economic growth. Indeed, by implementing suitable

fiscal policies, Romania exited the excessive deficit procedure in 2011.

Key-words: fiscal policies, budgetary deficit, economic growth

1. Introduction

As public finances form a field of research that deals with public revenue and

expenditure problems in particular, the importance of the topic is reflected through

the macroeconomic imbalances and lack of economic stability that Romania has

faced in recent years.

We chose to approach this subject because fiscal consolidation policies play a

very big role in the economic growth and welfare of society. Fiscal policies aim to

reduce fluctuations and economic instability, protect consumer incomes and

stimulate development. The importance of this tool is visible to everyone, even to

people without direct involvement in the economic system. The moment of such a

study is suitable. Over the last 12 years, economy experienced an ascending trend,

followed by recession, while economic growth has resumed in recent years. Lately,

1 Lucian Blaga University of Sibiu, ialomitianu.razvan@yahoo.com

2 Lucian Blaga University of Sibiu, aureliandanu@gmail.com

3 Lucian Blaga University of Sibiu, bucoi.alexandru@gmail.com