Effects of the crisis will persist for another one year or two
“Effects of the financial crisis will hurt the real economy of Romania and the situation will not recover within less than one year or two, and Romania will take the heaviest blows in the coming period”, said senior economist of Raiffeisen Bank Romania, Ionut Dumitru (photo).
He also mentioned that Romanians are the most optimistic Europeans (according to latter reports) refusing to limit consumption over saving.
“Not many Romanians are actually realizing the difficult times we are experiencing now. In this context of the crisis, the 15-20% growth of retail is eerie, and this is why I think Romanians need a more prudent behavior focused on saving,” Dumitru added.
Approximately two thirds (65%) of Romanians did not used any saving instrument, which places Romania on the last position in over 20 countries surveyed by GFK Romania, commissioned by Aviva Plc, report recently published by the insurer.
At present, Romania is dealing with a dwindling demand on export markets, which has led to two major effects in the real economy: production cut and massive lay-offs.
Rating agencies, sent to the wall. Romania is an investment grade country
As far as the negative effects are concerned over the economy due to rating downgrade by S&P and Fitch, banking analysts stressed once again that Romanian meets all criteria for an investment grade category.
Analysts added that the decisions of the two agencies are not grounded, given the fact that Romania is financially endorsed by European Union.
“At present, Romania meets all the requirements of the investment grade category, as we benefit of EU’s anchor, which is extremely important. Romania’s removal from this category is an unprecedented event in European Union”, Dumitru added.
BCR’s senior economist, Lucian Anghel said that from the standpoint of rating agencies’ credibility, the role of European Commission and of International Monetary Fund will become a core element.
“In the lack of expertise, we shall witness a mounting oversight authority of European Commission and of IMF, and Romania must be in line with their recommendations in the future,” Anghel added.
Radu Craciun, investment manager with Interamerican Pensii, outlined two aspects related to rating agencies and to recapture their credibility.
Craciun signaled the need for credit agencies, but it would be better if they will function in a different framework, in order to be less exposed to interests’ conflicts.
As for the country rating cut, the decision is fair on what the additional risks are concerned, but it is unfair to remove the country from the investment grade category.
S&P cut one-notch Romania’s rating late October, decision which triggered the removal of Romania from investment grade category, the main reason being the mounting dependence to foreign financial sources which are becoming more and more unsecure.
On October 10, Fitch Ratings cut by two notches Romania’s rating down to a level outside investment grade category.
Translated by Camelia Oancea
In lipsa unui acord scris din partea InternetCorp, puteti prelua maxim 500 de caractere din acest articol daca precizati sursa si daca inserati vizibil linkul articolului Crisis will continue to hurt Romanian economy for another 1-2 years.