Size of government in Romania is modest, compared to other European countries, with total public expenditures reaching 34% in 2015. A strong fiscal austerity program under the auspices of the IMF is under revision, with the implementation of a fiscal stimulus with tax custa and increased spending via public sector wage bill and other current spending. The rising government deficit (expected to rise from 1,5% to 2,9% of GDP in 2016) will leave public debt on a rising slope, although at moderate level of 39,3% of GDP in 2015. Economic growth rates are robust, but fiscal policy is procyclical. State owned enterprises remain one of the weak points of the Romanian economy: they are numerous and hold a notable role within the economy, especially within the infrastructure sector. SOE corporate
governance is weak, with low performance and profitability, relying on different government transfers and subsidies for needed investments, or in some cases, even day to day operations. This situation is one of the reasons behind under investment in public infrastrcture. After several successful rounds of SOE privatization in previous years, further privatization plans of big SOEs in energy sector have been delayed, due to restructuring and insolvency proceedings. There were substantial revisions of different tax rates, in order to provide more space for private consumption: excise duties and helathcare contributions were decreased with the new Fiscal Code from 2016, as well as the standard VAT rate from 24% to 20%. On the other hand, unexpected additional taxes on natural gas and electricity, that were istituted in 2013 and expected to expire unitll the end of 2015, were prolonged untill the end of 2016. Personal and corporate income tax in Romania remain flat, set at 16%. In 2016 the tax for dividends was lowered from 16% to 5%. Labour tax wedge in Romania is high, approximately 42% which is much higher than in OECD countries as a whole.