The government’s official growth forecast is 4.1% for this year, while all the other economists see the Gross Domestic Product increase by 3.5% to 4%.
“We have a start of the year with a relaxed economic, monetary and fiscal-budgetary policy, which encourages aggregate demand,” Radulescu said on ZF Live.
Last year’s GDP growth was largely because of the increase in consumer spending fueled by wage raises, food VAT cut and of the resumption of lending spurred by the interest rates at all-time lows.
Radulescu pointed out one thing that bankers and bank economists analyzed but was barely discussed publicly, namely that the connection between the trend of the economy and trend of lending has become weaker and weaker in the past few years so the two are no longer dependent on each other. This is unlike 2007 and 2008 when the surge in lending led to a real estate boom, followed by a harsh correction afterwards.
Radulescu believes that the economy being less dependent on lending is because, on the one hand, consumers are more cautious and on the other, the savings rate is at an all-time high, which means consumers have the necessary resources for spending without having to take out loans.
Romania’s central bank data show that the deposits made by residents – consumers and companies, increased by 8.6% to 253 billion lei (EUR56 billion) last year. Consumers keep RON146 billion in the bank, while companies more than RON106 billion.
Lending will continue to increase because the economy is growing so Andrei Radulescu expects non-governmental lending to go up by 5% to 6% this year, 7% next year and 9% in 2018.
“The economy is in the third year of a new economic cycle and the prospects of lending demand and supply are good.”
The former government built the budget around a 2.5% economic growth, but the data the National Statistics Institute is due to publish in February will mostly likely show actual 3.5% to 4% growth in 2015.
(English version by Loredana Fratila-Cristescu)