Eugen Rădulescu, BNR advisor, warns about fiscal imbalances and political instability. "We are on a knife's edge!"

Romania is at a crucial moment for its economic development, according to Eugen Rădulescu, advisor to the governor of BNR, who spoke at the conference NewMoney.Talks: 'Turning Point'.

He emphasized that the period of economic growth based on mobilizing additional resources is coming to an end, and the country rating of BBB- with a negative outlook reflects deficiencies in managing the deficit and political instability. Although Romania has recorded rapid economic convergence, current challenges such as the labor force deficit and the high number of unemployed youth threaten long-term development. Rădulescu compared Romania's situation to the 'middle-income trap,' mentioning that a decrease in the share of industry in GDP could affect the transition to a developed economy.

The proposed solutions include state reform and improving tax collection, considering that Romania has one of the highest VAT non-collection rates in the EU. Rădulescu concluded that the future of Romania's economic development depends on fiscal consolidation and maintaining a competitive industrial base.