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Rising oil prices and depreciation of the national currency affect local business

Major domestic industrial players are not agreed on the evolution of Romania's economy in the first half of the year, daily Business Standard reports on Monday.

Depending on the area of activity, business people questioned by Business Standard identified negative factors influencing their business as being the price of oil and steel, the depreciation of the national currency, and the decision by the National Bank of Romania (BNR) to raise key interest to 10 percent. However, few believe that global problems will drag down the Romanian economy this year. These same business people indicated that positive factors are foreign investments and consumption. 'I see that BNR (National bank of Romania) is doing all it can to limit demand, which is in the economy's disfavor. I am unhappy about measures taken by BNR, which limit the development of the market. I believe that tempering demand is not a long-term solution, and that demand should be encouraged,' according to a statement for Business Standard by Dan Sucu, President of the Mobexpert group of companies, the largest domestic furniture market player. Sucu added that his company hopes to meet the turnover target it budgeted for this year. 'The economy in the first half of the year was better than expected, but this lead to a widening of several deficits. If the global economy continues at the same pace, we could see corrections of economic growth in 2009,' said Florin Citu, economic analyst. The main positive influence was the Romanian consumer, while the price of oil had a negative impact, added Citu. He also indicated that BNR's monetary policy to sustain the exchange rate had a major influence, 'but that this is a double-edged sword, and we could see unemployment and bankruptcy in the future.' Dragos Dinu, CEO of A&D Pharma, the largest pharmaceutical company, believes that several positive elements in the first five months of the year are foreign direct investments, which rose 90 percent compared to the same period in 2007, and some synchronization with European legislation, although difficulties on the labor market are expected to persist. Sursa: http://www.rompress.ro

Tags: business national bnr

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