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Lazea: the impact of lending on the economic growth is overestimated
The impact of lending on economic growth is overestimated, the advance of GDP being possible without banking lending, Valentin Lazea, head economist with BNR says, mentioning that the banks should focus on the loans offered to companies and less to the population.
‘In Romania, the hypothesis is confirmed by figures, as in 2012 we had a negative increase of the real governmental loan but GDP increased, similarly in 2013, when the real loan contracted, but GDP increased by 3.5%. Thus,the impact of lending on economic growth should not be overestimated’ Lazea stated during the conference Country Risk 2014,organised by Coface and Mediafax.
On the other hand, Lazea added that the data show that a lower impact on economic growth has the lending of the population and the evolution of the GDP is influenced by the lending of the companies.
‘The loans offered to the population are for consumption and for residences. The consumption loans were not so important for the increase of the GDP as they were destined for purchase of imported goods, and imports do not increase the GDP but they diminish it. At the same time, the loans for residences created less VAT, as on the one hand, the majority of real estate tradings was made without loans, the rate being 9 to 1,in favour of the acquisitions without loans even during the boom period, and on the other hand, most real estate loans had as destination the purchase of old houses, namely they did not contribute to the gross VAT’ Lazea said.
Moreover, the contribution of the companies in the real estate domain at the VAT generated by the financial companies is modest, namely 2.5% including the boom period. ‘As the debt service for the population of Romania reached levels similar to that in the euro zone, to force the resumption of lending in this sector does not seem a good measure’ Lazea said..
As regards the lending to the companies, the BNR representative appreciates that, although it has important effect on the GDP, it did not have the estimated effect.He explains this phenomenon as only 12-14% of the companies use loans to finance the activity,preferring the commercial credit and the debts to the shareholders or the sale of assets, a situation which was real even before the crisis.