“People keep talking about the deindustrialization of Romania and, indeed, if we compare with 1990, industry accounted for 40% of the GDP back then, we then went to 25% and are now at 31%. I would like to draw the attention to the indicator showing industrial orders in February, which rose 20% on the year-ago month, which means we can expect good growth of the industrial output,” Mugur Isarescu said at the event celebrating Romania’s central bank’s 134th anniversary.
Industrial orders rose 15% in the last twelve months. The central bank governor said there were indeed discussions about the areas where industrial development was conducted considering the ‘leopard skin-like’ development because the administrative allocation of productive forces no longer exists.
The governor also mentioned the surprise current account surplus in January.
“I don’t think we should keep this surplus for the entire year, because too sudden a shift from attracting capital to surpluses may cause damage to the economy.”
He added that might be a model of the ‘70s and ‘80s.
“Ceausescu took out loans in ‘70s and ‘80s and then forced the economy to repay them. Such brutal moves would push the economy towards its death. We need longer cycles. It’s important that the current account deficit be covered by foreign direct investment and EU fund inflows. It’s something sustainable that doesn’t lead to corrections,” the governor said.
The year 2014 is also important because Romania has joined the European club in terms of price trends. “In the summer of 2014, the inflation and interest rate performance criteria for euro adoption will be met. It doesn’t mean we’ll join the euro zone but the message is we are in the European club.”
(English version by Loredana Fratila-Cristescu)