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Johan Meyer, Fondul Proprietatea: 2019 - Good perspectives but conditioned by political and legislative stability
Johan Meyer, CEO Franklin Templeton Investments Bucharest Branch and Portfolio Manager of Fondul Proprietatea, has made an analysis of Romania’s economic perspectives for 2019, of which we emphasize the following aspects:
· 2019 will bring along a decrease in private consumption growth, moderate inflation, low unemployment, as well as upward pressure on interest rates.
· Our expectations regarding the energy sector have changed following the adoption of GEO 114/2018. While we had initially been quite optimistic regarding its potential for job creation and contribution to State revenues on the long-term, the capping of gas and energy prices and new taxation regime potentially put the country’s energy independence at severe risk.
· The recently introduced tax on banks might backfire, creating a snowball effect for the entire economy, especially on the background of growing macroeconomic imbalances which call for prudent, market-friendly fiscal policies.
· It is crucial for Romania to foster an environment where companies are confident to invest in businesses on the long-term, so that they continue generating income for the State in a sustainable way though dividends and taxes on profits.