Romania can reach 6-7 percent in economic growth, says Mark Mobius

Mark Mobius, executive president of Templeton Emerging Markets Group, sees no reason why the Romanian economy can’t grow with 6 – 7 percent yearly, although the country went through a crisis and obtained a growth above 1 percent this year. This statement was made during a press conference that presented the financial updates in Fondul Proprietatea, where Franklin Templeton is investment manager and administrator.

Mobius added that Romania is not only an emerging market but also frontier one, which should make it more attractive for investors. However, he believes that nowadays, Romania should look towards East for potential investors instead of focusing on traditional Western economies. He went on saying that around USD 450 billions have been raised in emerging markets, in the last 10 years, almost half of it being raised only in China.

“The single digit interest and inflation rates are also good for Romania”, said the executive, who sees great opportunity in the IPOs or SPOs of the Romanian SOEs (state-owned enterprises), that need to become profitable.

“The total value of derivatives reached USD 650 trillion, which is 10 times larger that the world GDP, and this represents a serious threat to economies all over the world”, warned Mobius.

Mark Mobius stated that Fondul Proprietatea is run like a private equity fund, and that effort is put into getting companies listed on the BVB (Bucharest Stock Exchange), but this will be a long term project.

An Asian company will build a new hydro plant in Romania, with a total investment of USD 1 billion, half representing equity and half bank, added Mobius. However, the executive refrained from further commentaries on this topic, but explained that Romania’s energy prices need to be liberalized.

Ovidiu Posirca