The National Forecasting Commission in Bucharest revised this year’s growth estimate from 2.8% to 3.3%, with the pace to pick up over the coming years and reach 4% by 2018.
The European Commission and the European Bank for Reconstruction and Development, one of Romania’s main lenders, estimate the economy to grow at an average rate of 3% over the coming years, compared with 2.5%- 2.8% so far.
Economic analysts are even more optimistic. Andrei Radulescu, the chief economist of Banca Transylvania (TLV.RO) expects 4.1% growth for this year.
Economic growth stood at 4.3% in the first quarter compared with the year-ago period, as construction returned to growth especially on the residential segment, while IT industry investments picked up, driving up demand for workforce and implicitly salaries.
The significant decline in leu interests (the three-month ROBOR index used in calculating loan interests is now at 1.3% to 1.4% compared with 6% in 2012) helped increase Romanian consumers’ disposable income, driving consumer spending up.
The auto market has recovered, and truck sales went up by more than 20% in the first four months, considering that a truck costs EUR80,000 to EUR100,000, which is a good sign for the economy and the confidence of the customers in the future.
The government’s investments in infrastructure, however, are still going down, despite the budget posting surplus, as is lending, where the rise in leu lending is unable to offset the decline of the foreign currency lending. On the one hand, banks say they want to lend money to companies but are not getting enough bankable projects, while Romania’s central bank says there are enough bankable companies, but banks have to change their way of doing business and bankers be better trained.
“If the banking sector wants to offer something different than it has so far, it needs to have the people capable of doing it,” said Florian Neagu, head of the macroprudential risks department with Romania’s central bank.
The National Statistics Institute is due to publish a detailed breakdown of the GDP performance in the first quarter on Thursday, June 4.
(English version by Loredana Fratila-Cristescu)