Economic analysts’ forecasts for Romanian economy in 2013 point to a growth rate ranging from 0.5 to 2 per cent. In its autumn forecast, the European Commission estimates a 2.2 per cent growth, taking into account the fact that as compared to 2012 investm
Crediting will grow slightly, the European Commission report reveals, since banks continue the process of deleveraging in the wake of a long period of deterioration of the assets’ quality. In 2013, consumption in the private sector will stay high, the Commission believes, but it will be limited by the households’ need to regain their financial stability, as well as by the strict standards stipulated for consumer loans.
In 2013, quite unlike the 2010-2012 period, the state-generated consumption rate is expected to provide a positive contribution, which will only be limited to the Gross Domestic Product, as a result of the salaries increase in the public sector. The current account deficit is estimated to register a slight growth in 2013, accounting for 4.2 per cent of the GDP. In turn, the International Monetary Fund’s forecasts for 2013 point to a 1.8 per cent growth. For the years to come, the forecast growth stands at around 3 per cent. In this respect, here is what Economic analyst Florin Citu told Radio Romania:
Florin Citu: "As always, the IMF is predictably more optimistic than what I think is going to happen, but I’m closer to reality. It all very much depends on what happens outside Romania, but let’s just say a growth rate ranging from naught percent to 1 per cent will also be feasible in 2013. I would not compare that growth rate to what happens in the developed countries, because a 1 per cent growth for a poor country means much less than a 1 per cent growth in Germany, for instance. But for the countries in the region it is important that we remain part of the batch, that we do not join the negative side this time around and what matters most here are the decisions to be made eventually, as well as what happens outside Romania. “
The head of the IMF mission to Romania, Eric de Vrijer said Romania would have a modest economic growth in 2013, which is likely to occur even against the backdrop of better farming production. However, Eric de Vrijer took into account the difficulties Romanian has been facing with regard to the European funds absorption and the delay in implementing the structural reforms. Yet the Romanian Central Bank is downright in this respect, QUOTE Romania will not register any economic growth in 2013 unless the European funds absorption is unblocked, as these funds are the only financial resources available for this period of time, capable of replacing foreign investments as well as the budget ones, just as the Central bank’ s Governor Mugur Isarescu believes. The Fiscal Council president Ionut Dumitru shares Mugur Isarescu’s opinion.
Ionut Dumitru: ” The growth of the European funds absorption rate is crucial in this respect. If we fail, it will be impossible for us to finance the budget deficit; there will be a lot of pressure coming from the depreciation of the currency rate and, touch wood, we will lapse back into recession and financial crisis.”
In the coming two years, Romania has to pay back some 13 billion euros of its public debt. Fortunately, the public debt only accounts for 30% of the GDP.
Ionut Dumitru: “The Finance Ministry and the National Bank should pay in the next two years, some 13 billion euros in foreign debt and other foreign currency debts. Unless we manage to attract new funds from foreign private markets and absorb more European money, the international reserves might decrease rather quickly. So we have no problems paying the debts we have at this point. We have a substantial international reserve, but without new financing from international markets or European funds, we will see this international reserve fast decreasing.”
In his turn, the president of the Bucharest Stock Exchange, Lucian Anghel, believes that getting funds through the stock market can and must be, in 2013, an alternative for attracting the funds needed for relaunching those sectors of the economy that can ensure the sustainable development of the country:
Lucian Anghel: “We hope the capital market will be more dynamic. A number of companies are to be listed, which are quite interesting for investors and have a high potential for development and efficiency. For instance, in the second half of 2012 there was a secondary public offering for Transelectrica shares, and it attracted bids of 50 million euros, from both local and international investors. This is a good reason to believe that the Stock Exchange may be used as one of the alternatives available for the funding of the national economy.”
In turn, inflation is expected to return this year within the range targeted by the National Bank, which is good news for investors, as senior economist with the central bank, Valentin Lazea explained. For this year, the National Bank estimates a 3.5% inflation rate. As regards the budget deficit, the budget minister Liviu Voinea said the deficit will drop this year from 2.2% of the GDP in 2012 to 1.7% of the GDP.