Growth prospects could become more constrained after 2019 given narrowing room for expansionary
policies and lacklustre private investment.
Caption: FIG 2 New orders and production both experienced strong expansionary
trends, starting in the fourth quarter of 2016, and have continued to expand month after month at these elevated levels through April.
Economists have repeatedly explained that, in an economy such as Romania, a pro-cyclical fiscal policy in the expansionary
phase is almost doomed to remain pro-cyclical during the downturn as well, deepening unemployment.
The government will justify it by saying that it is using expansionary
policy to ensure that GDP growth targets are met and the rising growth rate does not falter and fall again.
'For achieving a sustainable high economic growth rate, a little expansionary
fiscal policy is required for next fiscal year,' said Adviser to PM on Finance Dr Miftah Ismail while talking to media.
She stressed the importance of continuing to implement expansionary
policies to stimulate the growth of private investment and its impact on GDP, which she believes ensures more sustainable growth.
policy supported by non-oil revenue growth and PIF, NDF spending:
Looking ahead, we expect the oil price to be range bound (with downward bias) from the current levels, while expect Saudi market participants to increase focus on infrastructure-driven sectors as it is expected to be one of the major beneficiaries of any expansionary
budget - well-reflected in $19.2 billion announced stimulus last week.
In 2016, two shocks - a prolonged drought and a sharp decline in SACU receipts - severely hit the economy, while an expansionary
fiscal policy worsened fiscal and external balances.
policies will be weakened by a higher federal funds rate.
In a research note titled 'EM (emerging market) hit by Trump Tantrum' on Friday, Citigroup said boosted by expectations of a rotation in the US policy mix - with expansionary
fiscal policy likely taking over from monetary policy - the 10-year US dollar Treasury yields had risen in less than 48 hours by 45 basis points while the US dollar strengthened by 3 percent over the same period.
The document states that "the 2017 budget is an expansionary
budget," particularly as its volume has increased by 12% in 2016 to 32.58 billion dinars in 2017 against 29.150 billion dinars in 2016.