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Isarescu: Romanian 2008 Economic Growth Seen At 8%, 9%

Romania’s economic growth is seen at 8% or 9% in 2008, and the inflation rate at 6% or 7% at yearend, central bank governor Mugur Isarescu said Monday.

"We have good chances to have an economic growth between 8% and 9% in 2008, and an inflation rate between 6% and 7%," Isarescu added.In 2007, the country’s economy grew 6% on the year in real terms, compared with 7.9% a year before.Romanian economic growth was 8.2% in the first quarter of 2008.Romania's central bank Monday revised its inflation forecast from 6% to 6.6% in 2008, and from 3.5% to 4.2% in 2009.

The central bank has set an inflation target of 3.8% for 2008, and of 3.5% for 2009, with a plus or minus average of one percentage point.Asked whether the inflation target is subject to changes in 2008, on the price increase over the forecasted level, Isarescu said a possible change would not help.

"Keeping the inflation target shows we made a firm commitment. Forecasting yerend inflation is not a game. This is a commitment on decreasing the inflation rate," Isarescu added.

 

 

Romanian Central Bank Revises ’08, ‘09 Inflation Forecasts

Romanian central bank revised its inflation forecast from 6% to 6.6% in 2008, and from 3.5% to 4.2% in 2009."We should not doubt the economy is overheated. If the economy is overheated, negative effects trigger inflation pressure and external deficit which strives to reach 14%," BNR governor Mugur Isarescu said Monday.Isarescu added the economic growth could set between 8% and 9% at yearend, while inflation rate between 6% and 7%.The central bank has set an inflation target of 3.8% for 2008, and of 3.5% for 2009, with a plus or minus average of one percentage point.Isarescu said the inflation target for 2010 is a tough decision, and after talks with the central bank’s administration board will give further data in that respect.

 

Romanian July CPI Seen At Over 9%, 9.1%

Romania’s consumer price index will most likely be over 9% or 9.1% on the month in July, to subsequently recover, central bank governor Mugur Isarescu said Monday."We will have a loop in July of over 9% or 9.1% and then the inflation rate will recover," Isarescu said in a press conference.

Romania's consumer price index was 8.61% on the month in June. Prices for food products and fuel rose 0.28% on the month in June.The central bank has set an inflation target of 3.8%, with a plus or minus average of one percentage point.

 

Isarescu: Final decision on modification of new lending rules to be taken in two weeks

Romania's National Bank (BNR) is to take, in the upcoming two weeks, a final decision on the modification of the lending rules, according to BNR Governor Mugur Isarescu.'In the following two weeks we are going to take the final decision', stated on Monday Governor Mugur Isarescu, on the occasion of the quarterly inflation report presentation.The lending regulation proposed by Romania's National Bank has triggered strong protest from the commercial banks, which have warned that the real estate market could land in a crisis.The bankers asked the revision of the rules through which lending could be granted on the basis of the fiscal declaration and of the stress test, trying as well to avoid lending restrictions below a ceiling of 40 percent of the income, compared to 70 percent at present.

According to modifications proposed by BNR, the commercial banks should proceed to a risk simulation when they grant the credits and their clients will receive a repayment schedule, containing much higher rates, given the case of the leu strong depreciation and higher commission levels.Bankers are concerned that the new rules submitted by the central bank would in fact deprive the credit institutions of a lot of their clients and the granted credits would be much smaller. According to the banks, the lending granted just on the basis of the previous year fiscal declaration, a fixed interest rate, as well as the calculation of the credit at the highest interest rate on the market in the past 18 months are too drastic rules. 

 

Mugur Isarescu: Real estate market headed for natural homogenization

 

The reaction of the local real estate market was the effect of the need for homogenization rather than of the decision of the National Bank of Romania to increase the key interest rate or set restrictions on lending, central bank governor Mugur Isarescu stated on Monday. 'Some believe this correction was prompted by the decision related to the key interest rate, but I believe that this is rather about homogenization, which is a natural trend in a market that has for a long time been ill-balanced, with major price differences,' explained Mugur Isarescu.The lending regulation proposed by the National Bank of Romania sparked strong protest by commercial banks, that warned that the real estate market might be driven in a crisis.The bankers asked for the revisal of the requirements that the credit be disbursed based on a fiscal record and of a stress test and also sought ways to bypass the cap on lending, which - in the new variant - should be 40 pct of the applicant's incomes, as to the current 70 pct.According to the amendments proposed by BNR, commercial banks should conduct a risk simulation when disbursing loans and the clients will receive a repayment break-up for far higher installments, for the eventuality that the leu saw a sharp depreciation and commissions surged.

The bankers fear the new central bank regulations could practically thin out the clientele of credit institutions and loans will be far lower. The banks consider that the loans granted only on the basis of incomes reported to the Tax Authority the year before, the fixed interest rate and the calculation of the credit for the highest interest rate registered on the market over the past 18 months are all far too tight regulations.

Sursa: http://www.actmedia.ro

Tags: isarescu lending decision bnr rules banks interest credit market which monday growth economic romanian rsquo inflation mugur governor central target

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