Without returning to its high level of 2016, growth should remain strong in 2017. As previously, the main driver is domestic demand. Household consumption (70% of GDP) will be the leading element. Once again, households will benefit from employment increases, wages and pensions rise—both in the private and public sectors—and from taxes fall (remains to be defined). Wages are being driven by the increasing scarcity of labour as a result of emigration and the ageing of the population, despite the financial incentives being used to encourage mobility among the unemployed and reduce long-term unemployment. Consumption will however slow sharply because of the declining impact of the tax cuts and the return of inflation, connected with the overloading of existing production capacities. Investment (24% of GDP) will continue at a strong level against a background of low interest rates and the positive outlook for growth. It will be sustained in construction, telecommunications and computing. Investment aid (0.52% of GDP) will be available to the SME sector. Despite the poor level of take up because of the bureaucracy involved and administrative shortcomings at the local level, European funds will contribute in maintaining the moderate growth in public investment, but still not enough to make up for the infrastructure inadequacies. The State will continue to guarantee half of loans taken out by first time buyers with the aim of encouraging lending and lowering the cost. However, there is one unknown that arises from the application of the Datio in solutum law approved in April 2016 that allows the borrowers to discharge their commitment by transferring the ownership of their house to the creditor, and the inhibitive effect that this could have on the supply of credit. This comes on top of the cost for the banks (530 million euros according to the Central Bank, or 4.2% of outstanding credit) of converting the lei at the rate of exchange at the time of the signing of household loans denominated in Swiss francs (law of October 2016). The cost will rise considerably if it is extended to loans in euros (more than half of outstanding credit). The Constitutional Court, examining the law, is likely to amend the application. With substantial non-performing loans (10% in October 2016), but with a gradual reduction in these, and the laborious application of securities, prudence will remain the key for the banks, 90% subsidiaries of Austrian, Dutch, French and Greek groups. They will continue to repay their debts to the parent companies, whilst building up a domestic deposits base. Exports (39% of GDP) will increase at a reasonable rate, but below that of imports under the impetus of domestic demand, and the contribution from trade will remain negative. Sales of cars (DACIA and Ford) and tyres (a quarter of exports), together with wood, fertilizers, metals, medicines, machines and clothing will feel the benefits of any increase in European demand. Exports of cereals and oil crops will depend on the harvest.

The relaxing of budget policy triggered a deepening in the public deficit and a slight increase in the debt. At the beginning of 2017, VAT will be further reduced, from 20% to 19%. The single income tax rate will be reduced from 16% to 14%, creating pressure on public revenues (32% of GDP) that are already too small to rectify the structural problems. Parliament also voted to remove 102 charges (0.2% of GDP), but this is now before the Constitutional Court for non-conformity with the law on budget responsibility. At the end its term of office he began examining proposals to increase pensions (3% of GDP) and reduce social contributions by 5% (1.3% of GDP). Whilst defence spending will increase from 1.5 to 2% of GDP, with the fight against tax evasion and the restructuring of the public sector reaching their limits, it is unlikely that these measures will be approved by the newly elected Parliament, or at least not all of them. The government will strive to ensure that the 3% deficit threshold is not exceeded, by cutting investment spending if necessary, so as not to come within the scope of the European Excessive Deficit Procedure. The trade and current account deficits, widened in 2016, reflecting the inability of domestic production to satisfy the level of demand. The deficit in the trade in goods exceeded 6% of GDP in 2016, whilst the surplus in services (around 4%) linked with tourism, road transport, IT and computers, and the outward processing of clothing and textiles will have increased. In 2017, the slowdown in consumption is expected to lead to a slight fall in the foreign trade and current account deficits. The income deficit (approx. 2.5%) arising with the repatriation of dividends and interest on the gross external debt (54% of GDP at the end of 2016, with one third for the State) will be almost double the remittances from workers abroad. The current account deficit will continue to be financed by FDI (approximately 2% of GDP net, unless a third car maker unexpectedly moves in) and European Funds (3%).

The December 2016 elections brought to an end the transitional technical government installed in November 2015 following the resignation of the Social-Democrat Prime Minister implicated in a corruption scandal. The Social-Democrats of the SDP won 46% of the votes and a victory over the Liberals, to retain their majority in Parliament. The accommodating budget policies are expected to continue under the new government headed by Sorin Grindeanu, in so far as they comply with the European criteria.