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Isarescu: Romania's economy is growing over its potential based on consumption
Romania's economy is already growing over its potential based on consumption and in case demand is additionally stimulated, there will be created no jobs in the country, but only abroad, on Monday said the National Bank of Romania (BNR)'s governor, Mugur Isarescu.
In a conference on the quarterly Report on Inflation on Monday, Isarescu presented "the real' problems the Romanian economy is facing nowadays, given that in the public space a series of accusations were launched as the BNR referring to the missing of inflation target.
"Should we stimulate the demand, also by cutting the interest rate, or by other methods of increasing the demand, we shall only create jobs abroad. We won't stimulate the domestic economy, since it is already over-drenched," the BNR governor said.
In addition, added he, there is a trend of tightening the labor market, since the gains in productivity are way lower than the pay dynamics.
Isarescu also said that the economic sentiment is getting certainly to the level it had in 2008, when it was confirmed that the economy was over-heated.
"We face a soaring consumption, that has triggered a significant imports' increase, we start again to spend from outside," the BNR head draw attention.
In his opinion, if anything is to be stimulated in Romania, that is the productivity, the investments and the job creation, and not the consumption more than it has been already dynamized.
As for the inflation target, Isarescu said the BNR has a mandate to keep prices stable, no word in its statute on inflation target whatsoever.
According to the BNR's head, Romania faces no deflation now.
"How could we be in deflation when we are confronted with a 20pct growth in sales and 10pct in incomes," the central bank's asked rhetorically.