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BNR: Recession is unavoidable, investments are needed
The National Bank of Romania (BNR) officials have sent a moderate warning regarding recession, saying that economic growth is automatically followed by a downturn. Currently, we are on the edge in terms of foreign deficit, we import much more than we export, and of budget deficit, sources from the central bank say.
There is a risk to fail meeting the 3% of GDP budget deficit target. Economy should count more on investments, not on consumption as it currently happens, the bank representatives say, digi24.ro informs.
The chief of the Fiscal Council, Ionut Dumitru, has recently warned that the loans taken by the state are closing to the alert level, then other analysts have sent alarm messages. Banking specialists say Romania is now in the poorest condition since the crisis one decade ago.
The latest ING report warns on the risks of Romanian economy, one year before presidential elections, during a period when the GDP growth is slowing down. “It is about the only country in the region having an expansionist fiscal policy or fiscal prospect, in the context of more uncertainties at global level and the Brexit,” ING chief economist, Ciprian Dascalu, says.
Official statistics say the state loans have increased from 12.4% of GDP one decade ago to 35.1% of GDP now.
Furthermore, the wage increases in the public sector would increase the gap between exports and imports by over EUR 1 billion. The real estate market shows signs of regression, housing sales have dropped by up to 30%, with a peak of almost 50% in Bucharest. In October some 53,000 real estate transactions were concluded, by 10,000 less than last year.