Demographics, low payment discipline in the economy and low financial intermediation are Romania’s main vulnerabilities, according to the ”National Structural Vulnerabilities Map” presented by the National Bank of Romania (BNR).
”For the first time in a stability report, we’ve included a Map of Structural Vulnerabilities – the big difference between systemic risk and structural vulnerability is that risks can be mitigated, tackled in relatively short and medium terms, and through appropriate policies over time the structural weaknesses are long lasting and long-term, and structural policy is needed to solve them,” BNR vice governor Liviu Voinea said.
The demographic problem is caused by natural population growth, which has been negative since 1991 and which last year was -3.1 per thousand, as well as emigration.
”Emigration has seen particularly high values in the last 15 years: the total of Romanians who have gone abroad, as a share in the total population, is 14 percent, and as a share of the total labor force, 36.6 percent. This means that if I add them to the country’s labor force, one in four able-bodied Romanians have left the country to work abroad, and the ratio to the remaining ones is one in three,” Voinea explained.
The second structural vulnerability includes the risks in the companies’ balance sheets.
The level of low financial intermediation is given by the share of banking assets in the GDP – 49 percent – below the share of other countries in the region, and the European average is five times higher. The low share of banking assets in the GDP can also be interpreted as an unused credit potential, especially for companies, according to the vice-governor.
”The main sectors that could access more credits are industry and utilities,” Voinea concluded.