BNR warns that real estate prices spike could pose risk

According to the National Bank of Romania (BNR), the Romanian economy is facing new risk, represented by the acceleration of prices in the real estate field. Specifically, the increase can bring to tensions and fuel deficits, data included in the report on financial stability presented on Thursday by BNR Vice Governor Liviu Voinea show.

However, this does not mean that the risks will materialize, BNR Governor Mugur Isarescu said, at the start of the conference. “It is our duty to keep an eye on these risks and to communicate about them. This contributes to diminishing the risk, does not mean that it needs to materialize necessarily,” Isarescu said.

Asked whether, in the case of the increase of real estate prices, BNR will intervene to curb any potential excess, Vice Governor Voinea also said that for the time being, it was not the case to intervene. However, he underlined, the BNR has this type of instruments at its disposal. “Economic growth is not determined by lending as a whole. It does not lack it, but also, it is not determined by it. That is why, possible monetary policy measures, which have a delay until they produce effects, could not have a big effect. For now we have noticed this risk, which is slightly above the threshold calculated according to the European Commission’s methodology,” Voinea said.