Florian Libocor, an economist at BRD-Groupe Societe Generale SA in Bucharest, says people are behaving like the government's largess will continue indefinitely. That's not likely to be possible as the European Commission warns on the sustainability of the Budget deficit.
"Citizens haven't accumulated wealth in recent years – they increased indebtedness based on positive expectations," Libocor said by phone. "Many people haven't even waited to see if the promises materialise and they consumed more but also accumulated more debt. At one point, a correction is inevitable."
The EU predicts Romania's economy
will expand 4.4 per cent in 2018 after eclipsing growth elsewhere in bloc last year. But the first signs of a squeeze on its citizens are appearing.
Inflation reached a 4 1/2-year high in December and the central bank has already begun raising interest rates, which had been stuck at a record low since 2015. Money markets have been ahead of the curve, pushing up monthly mortgage repayments for some Romanians by about 15 per cent in the past three months.
It may already be too late to set aside enough cash to cushion the blow.