The Socialist-led government, in office since the beginning of the year, has started implementing its popular election programme by further cutting the VAT rate and increasing minimum wages, as well as public sector salaries. This has given a boost to consumption which accelerated real GDP growth in the first quarter of 2017, to an unexpectedly high 5.7 per cent, year on year.
But not everything is rosy: gross fixed capital formation was lower than in the first quarter of the previous year, whereas inventories expanded. Investment outlays declined by 3.1 per cent, mainly in equipment, while construction investments expanded, mainly …read more
Source: Emerging Europe