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Vosganian: If Romania fails to exceed 2pct in economic growth, it will fail to bridge the gaps
If Romania fails to cross the psychological threshold of 2 per cent rise in its Gross Domestic Product (GDP), it will fail to bridge the gaps separating it from the other European Union member states, Economy Minister Varujan Vosganian told a conference on Thursday on risk management in funding Romanian companies organised by Legal Magazin and Business Mark in partnership with Romania's Economy Ministry.
'The Romanian economy is functioning on two levels and there are also two levels where it is vulnerable. It functions on the industry and export levels and it is vulnerable on consumption and investment levels. You may wonder how the one can exists without the other. Industry works without consumption because it found markets outside. Just think that compared with 2008, Romania's exports are now some 13-14 billion euros larger. Before 2008, exports used to be worth some 32 billion euros, while today they are worth 45-46 billion euros, even getting closer to 50 billion euros, which is significant. You may wonder how industry can function without investment. The industry operates today on the remnants of what happened before 2008,' said Vosganian.
He added that exports are the outcome of foreign investments conducted before 2008, while industrial development is the outcome of the same investments.
'That means the second half of 2013 should witness a major mutation. Why? Because the second part of 2013 has an overwhelming importance to the Romanian economy in this decade. Romania is restarting a new cycle of growth. From 1998 to 2003, there was a negative stage of economic cycle. From 2003 to 2008 there was a positive stage of the cycle. In 2009 we entered again a negative stage and in the second half of 2013 through perhaps 2018 Romania will again be in a positive cycle,' said Vosganian,
The National Statistics Institute (INS) has adjusted to 1.8 per cent the increase in Romania's H1, 2013 GDP, both in unadjusted and seasonally adjusted terms, up from an initial 1.7 per cent.
This summer, the International Monetary Fund (IMF) upwardly adjusted its estimates of Romania's economic growth in 2013 from 1.6 per cent to 2 per cent.