Romania’s economic growth to ‘barely exceed’ 1.5 percent this year, says BNR counselor

The growth of the local economy this year will “barely exceed” 1.5 percent of GDP, after gaining 3.6 percent of GDP last year, while the inflation will amount to 2 percent in December, said Lucian Croitoru, counselor of the governor of the National Bank of Romania (BNR) during the first day of the Foreign Investors Summit (FIS), organized by Business Review magazine.

Croitoru suggested that foreign investments are key for helping the local economy meet its growth potential, explaining that country grew by an average of 1.7 percent, when it worked “on its own”, without subsidies or capital inflows.

“Romania has started this year optimistically regarding the expectations for economic growth. In my opinion, the growth will barely exceed 1.5 percent this year in Romania, after the growth of 3.6 percent last year. This also indicates the problems in the Euro zone and not only,” said Croitoru.

The government and the European Commission, the executive arm of the EU, estimate a growth rate of 2.5 percent this year. The International Monetary Fund recently improved the country’s growth outlook to 2.4 percent, against a previous forecast of 2.2 percent. The World Bank, meanwhile, forecasts a 2.8 percent gain for Romania this year, upgrading its January estimate of 2.5 percent.

Croitoru said that from the vantage point of investors, it was important for Romania to focus on infrastructure development.

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“This is the key for improving productivity and the development of new businesses in Romania,” said the counselor.

Croitoru also mentioned the clarification of property rights, which is important for enhancing the country’s rule of law, and the tackling of corruption, are the other important factors that are taken into account by investors.

On the banking sector, Croitoru stated that lenders are well capitalized, while the level of non-performing bank loans has dropped from 22 percent to 17 percent, after the central bank amended the law, allowing banks to clean their balance sheets.

Ovidiu Posirca