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Analysis: Romanian economy is on a positive path


Romanian economy is on a positive path and the pandemic year, with its negative effects will be more rapidly surpassed than initial estimates, a Moneycorp analysis shows, the largest payment institution in Europe, according to which inflation will continue to represent a challenge throughout 2021.


Moneycorp Romania warns, in a new report from the Moneycorp Business Outlook series, that the temperate evolution of the euro exchange rate over this period confirms estimates made early this year, but the dynamic of the stock market may accelerate until the end of the year, on the background of the evolution of macroeconomic conditions.


The euro rate fits withing early year prognoses, with a constant average annual growth rate of 2%. According to analysts, the evolution of the rate will be influenced by the way in which the economic engine will restart after a year of unprecedented crisis, by the evolution of inflation and the level of reference interest rates.


The economic growth marked in the last two quarters, more rapidly than in other developed economies, comes to confirm the gradual recovery of business relations. The export increase prognosis, on the background of the return of demand from Germany, France and Italy, our main commercial partners, will have a positive impact for Romanian economy,” says Sebastian Bacioiu, head of dealing at Moneycorp Romania.


A historic chance for Romania will be the PNRR implementation, a program bringing 29.2 billion euros to the country, decisively contributing to economic relaunch.

The economy support programs launched at international level, generated extraordinary expenses. Beyond positive effects – maintaining businesses afloat, saving tens of million jobs – the main negative effect, taken into account since the beginning, was growing inflation, analysts say.


All economies were caught in this merry-go-round of price increases, consumption and production drops and supply difficulties, generating a significant inflation we also feel in Romania, 3.2% in May. In countries of our area, the situation is similar. Hungary has an inflation of 5.1%, Poland 4.3% and Czech Republic 3.1%,” an analysis made by Moneycorp shows.


According to experts, inflation will continue to represent a challenge throughout 2021, especially in a poorly capitalized economy like the Romanian one.

They say inflation pressures will be added to the ones generated by higher reference interest rates, central banks having this instrument to prevent growing inflation at their disposal.


In 2020, according to a Moneycorp barometer, 36% of companies transferred costs of the leu depreciation to the final price to consumers.


In 2021, this mechanism used to transfer currency risk to the consumer, cumulated with the price increase due to inflation, risks to significantly affect the competitiveness level of companies.


A significant part of companies with exposure to the exchange rate, started actively using instruments covering currency risk understanding they can prevent volatility, with beneficial direct effects on the commercial margin already undergoing inflation pressures,” Bacioiu said.


Romanian economy is on a positive trend, analysts say. “The pandemic year, with its negative effects, will be surpassed more rapidly than initial estimates, a sign that Romanian business has succeeded to a wide extent to adapt to challenges, to restructure and trace the first measures to exploit the economic growth potential. The evolution of inflation and of the reference interest rate as well as the approval of PNRR will be the main elements we'll have in view in 2021,”said Cosmin Bucur, managing director of Moneycorp Romania.


Present in Romania since 2016, Moneycorp is the largest payment institution in Europe. In Romania, Moneycorp works with 1,000 corporate companies and small companies, from varied domains like IT&C, Insurance, Industrial Equipment or FMGC.