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Lucian Croitoru (BNR): A credible economic growth, only in Q2 of 2011

Economic growth in Romania could be seen only in Q2 of 2011 and for short term, the growth potential will be low, Lucian Croitoru said, the adviser on monetary policy of the BNR governor.

« I think that in Q2 of 2011 the economic growth will be seen credibly and we will be able to say that Romania will be on a good trend. I don't see any signs that the capital flow in the private sector will resume. The private consumption will stay slow and no banking system will be able to resume lending as they wish, as the service of debt on household is almost double against the EU, 22% respectively. After ten semesters of subsequent drops, in Q2 there were the first signs of economic growth. I think for short term our growth potential will be slow and the inflationist pressure are big enough' Croitoru said.

He also added that the Romanians tend to become too pessimist, fact which will lead to the difficult resumption of consumption. « We tend to become pessimist and that is why the consumption will be resumed very slowly. The crisis came and, as everywhere in the world, Romania did the same: took the private money for the public money,fact which explains why Romania is today suffering. The Romanian state has no money and due to this they did not offer money as happened in the US for example' the BNR official said. As regards the inflation target, Lucian Croitoru showed the fact that Romania missed the estimation rather than reached it, but they could control it.

Lending resumption will take place after the first signs of economic growth

The resumption of lending will take place after the resumption of economic growth, but at present, the banking system in Romania has good capitalisation, Lucian Croitoru said. « Lending will be resumed but not as they say it on the market. Only after the resumption of economic growth lending could be resumed. And not vice-versa. Usually, banks are cyclic. Almost 70% of the loans offered to companies are for SMEs and only 25% of them take loans. I don't say that it could happen differently. I think for a short term that our potential for growth will be slow and then inflationist pressure are bigger than we expect'Croitoru explained, quoted by Agerpress.

As regards the capitalisation of the banking system the BNR adviser said that it is good, the average being 15%. Lucian Croitoru stated he was for competition in the banking system, and Romania's biggest problem at present are « deficits ».

« Competition in the banking system is big. Personally, I am for a high degree of competition. It would be a mistake if don't promote such a trend. The biggest problem of Romania is deficits. Even if there is no foreign crisis, in Romania there would have a domestic crisis. Romania did not have disasters in the financial system to get liquidity shots. The central bank ensured a functionality good enough and made use of all operations and instruments necessary for a good organisation' the BNR governor advisor said.

Commerce and manufacturing industry add over half of the non-performing loans

Commerce and manufacturing industry get over half of the loans with payment delays of over 90 days, the next in line being constructions and services, according to a presentation of the BNR governor advisor Lucian Croitoru. For each sector, the biggest share of non-performing loans in the loans in bonds overdue for September were in commerce ( 29.6%), manufacturing industry ( 23.55%), constructions ( 14.43%), services ( 13.95%) and real estate ( 12.92%).

At the opposite end, agriculture and energy generated together a little over 5% of the non-performing loans. At the same time, the data presented by the BNR governor advisor show a drop of the share of non-performing loans for the first four sectors ( commerce, manufacturing industry, constructions and services ) against the level at the end of last year, but an increase for the real estate sector. Croitoru stated that, in a seminar organised by RBS Bank in Azuga, that the level of non-performing loans is one of the reasons for which there are big differences between interests for loans and interests for deposits.

« The big spread shows problems in the banking sector not in the sense that I point to a problem. There are problems because there are non-performing loans, there are drops of profit and pressure to keep the spread. Of course drastic measures for adjustment in the banking sector would be useful, but this is competition in the banking sector in Romania' the advisor said. At the same time, the advisor of the BNR governor said that the public in Romania has a mistaken approach when they blame the banks for not giving loans which should support the resumption of economic growth,as the banks are pro-cyclic and the growth of GDP is first and then lending.

Sursa: http://www.actmedia.eu

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