The promotion of systemic reforms with limited financial and human resources is expected to be one of the major economic and social challenges of 2022, says a report by the Independent Think Tank “Expert-Grup” signed by Adrian Lupușor. The risks related to poverty amid the inflationary trends, in parallel with the slowdown in economic growth against the rapid growth of 2021, are another expected challenge, IPN reports.
Inflation in 2022 is projected to exceed 15% and will affect primarily the families with low incomes. “This will exert pressure on the social protection system and will stimulate economic and social inequalities,” runs the report. Furthermore, the rapid economic recovery in 2021 wasn’t based on a new development paradigm, being accompanied by the expansion of the macroeconomic deficit triangle that consists of the trade deficit, current account deficit and budget deficit. Given the high comparison basis, the economic growth in 2022 will be slower. The gas supply crisis can recur owing to the difficult energy agenda with the Russian side. Also, the new COVID-19 wave associated with Omicron risks endangering the sanitary situation and affecting the economic activity and social situation.
The accurate implementation of the Third Energy Package, interconnection of the national electricity networks with those of Ukraine and Romania and improvement of energy efficiency are among the main challenges of 2022 that will be inherited from 2021.
Among the most important positive economic and social results of 2021 are the rapid economic recovery after the recession of 2020, which enabled to increase the amounts collected as taxes and to strengthen the budget, solving of the gas supply crisis and establishment of a more predictable framework in the energy dialogue width the Russian Federation and Gazprom.
The report author also noted the stimulation of the social agenda in response to the gas and pandemic crises and the population’s expectations following the expanding poverty after the crisis of 2020. In particular, the minimum pension was raised to 2,000 lei, the mechanism for subsidizing the higher natural gas rates was developed during a record period of time and a package of support measures during the pandemic was worked out. Also, the stability of the national currency was ensured and the country’s foreign exchange reserves were strengthened.
“The main negative economic and social trends and events of 2021 include the higher inflationary pressure with repercussions for families with low incomes, planning of a too big budget deficit against the economic situation and the risks for 2022, worsening of the quality of the decision-making process (introduction of a number of bills without sufficient consultations), postponement or non-initiation of reforms of major importance, such as the territorial-administrative reform, local financial decentralization or reform of the central public administration, and the reduced functionality of particular public institutions,” says the report.
