RSS
XTB Analysis: Economic slowing down in Italy may affect certain economic sectors in Romania
Connections between Romania and Italy are closer than with any other country which has recorded a significant number of corona virus cases, both from prospects of the flow of persons and from economic point of view, XTB analysts consider. The rapid evolution of the epidemic in Italy is a worrying situation, investors and economic actors trying to evaluate it while getting ready for it.
“On one hand, a slowing down of economy in Italy, even if temporary, can mean the moderation of economic activity in certain sectors, while the risk of virus spreading favored by travels from Italy to Romania can induce a vulnerability of a different magnitude. At present we see a moderate reaction on the exchange, drops being below the ones recorded by the German exchange (at 13.30, over -3.5% against less than 2.8% for BET). Romania delivers especially electric machines and equipment, clothes and footwear, automobiles and car parts, and import from Italy turbines, engines, electric machines and equipment, plastic materials. The total volume of commercial exchanges was 18 billion euros in 2018, important when considering the volume of overall trade of about 150 billion euros. On a short term, investors might be worried and very strict measures efficiently implemented are needed to avoid an unwanted development of effects on real Romanian economy,” said Claudiu Cazacu, Consulting Strategist at XTB Romania.
Moreover, it will be a challenge for public health systems in Europe, especially in countries which cannot boast state of the art logistic. The European Commission answer was quick, announcing an aid of 232 million euros to support member states in their effort to fight the problem.
About XTB
With more than 15 years of experience, XTB is now the 4th largest brokerage house for FX and CFD in the world and the largest in Central and Eastern Europe. They have offices in ten countries, including Great Britain, Poland, Germany and France. XTB is also managed by the most important supervision authorities in the world, including FCA and KNF.