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Coface: Romania manages an unexpected economic recovery in Q4 of 2020, based on the state support measures
Romania has managed an unexpected economic recovery in Q4 of 2020 based on the measures for support made by the state extremely prompt and targeted, but in 2021 we have to pay attention to a series of risks, stated on Wednesday Eugen Anicescu, country manager Coface Romania in a press conference.
‘Romania has registered in Q2 of 2020 an economic drop of 10%, the most severe of the last 25 years, followed by a slight increase in Q3 with a minus of 6% and in Q4 there was an unexpected recovery, with growth against the previous quarter and only a drop of around 2% against Q4 of 2019. Practically, Romania managd a quick recovery, based on the support measures of the state which were extremely prompt and targeted. Then, there was good consumption behaviour of the population, a change of expenses from certain categories such as travel, to home furbishing,etc. So, a resilient consumption. Similarly,in Q4 which, despite a weak contribution on the part of agriculture, this good evolution was achieved as the economy kept a calm development and did not have those specific evolutions for Q4 of the previous period. Practically, December was a month when there was work done and every evolution managed to produce good recovery, but 2021 is not without risks’ Anicescu said.
According to the Coface specialist,Romania must take into consideration the avoidance of a series of risks for this year, the top being the pandemic evolution.
‘Coface sees a first risk connected to the evolution of the pandemics (…) For Romania, another risk which must be managed in 2021 is that one connected to
the sustainability of the budgetary scenario which we have already approved. Another element for 2021 is the evolution of consumption. We know that 70-80% of the GDP is made on consumption.This was the case in 2020 as well when consumption had a significant impact, but we see fewer stimuli in this area. Growth of salaries which is less possible and, similarly, uncertainty on the market, all can have some influence’ he said.
‘Another important impact, especially on the business environment, is that connected to the state aid frames. It is necessary to see what happens in 2021 as we don’t think that the business environment is prepared to be on its own. The fifth risk we envisage for 2021 is that one connected to payment behaviour on the market, a possible growth of defaults in the area of banks, non-performing loans and which could bring in the appetite for financing supplimentary pressure on financing. It is difficult to estimate, at present, for short term, what is going to happen’ Eugen Anicescu said.
According to the published data, on Tuesday by the National Institute for Statistics (INS) GDP of Romania grew by 5.3% in Q4 2020 against the previous quarter of the same year, but as whole the Romanian economy got contracted by 3.9%.
Coface organised on Wednesday a press conference where the Study of Insolvencies in Romania is going to be launched with data for 2020.