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BNR's Croitoru: Romania cannot have sustainable growth due to lack of savings

Romania cannot have a sustainable economic growth because the savings' level is very low, but maintaining coherent policies to attract foreign capital may be a way out of this, Advisor to the National Bank of Romania's (BNR) Governor Lucian Croitoru told the Focus Energetic conference on Thursday.

'Why is Romania unable to grow on its own bases? Because it cannot invest and the savings' level is very low. The per capita income of which savings can be made is very small. There should be reforms leading to an increase of the per capita income,' said Croitoru.

For an economic growth to be sustainable, three elements must exist: capital, labour and factor productivity, he added. 'Over the previous years, 6.1 percent of the 6.4 percent of economic growth was due to capital,' the BNR official said.

'The second way to sustainable economic growth would be an invasion of foreign capital. This also creates debt. We have many loans to take. So, it depends on the entry of capital. And capital entry depends on coherent policies,' said Croitoru.

The Advisor criticised the possible introduction of a law which could allow debtors not to pay their bank rates for fixed periods of time, i.e. for half a year or a year, and also taxing wealth or stocks, referring again to coherent policies as the only way to obtain sustainable growth.

'This involves tacitly accepting the fact that payment in due time is optional,' explained Croitoru.

The conference on Funding Energy Investments organized by Focus Energetic is being held in Bucharest on Thursday and the main theme of the talks is attracting the necessary funding to development projects and for upgrading the energy sector.

Sursa: http://www.agerpres.ro/

Tags: growth croitoru sustainable capital romania cannot bnr

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