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Alpha Bank: Romania will begin the economic recovery in 2010

The estimate of the bank shows a shrinking of the private consumption in Romania, from 9.5 per cent in 2008 to 3.7 per cent next year and 4 per cent in 2010.

Sinaia - The economic growth of Romania will slow down to 3.7 per cent in 2009, vs. 8.5 per cent this year, on the background of a strong shrinking of the internal demand, the chief economist of Alpha Bank Group, Michael Massourakis, said yesterday at a seminar on banking and financial problems. But he has also good news. According to Massourakis, the growth will return to a higher level in 2010, when the GDP will advance by 4.7 per cent. "We see a slowing down of the economic growth in the whole region (Southeast Europe - editor's note), during the whole next year. The dynamics of the economy of the region will fall to 3.5 per cent in 2009, from 6-7 per cent this year. In 2010 we shall see a recovery, but not up to the potential of growth or to the levels to which we got used in the region. The growth will be below the potential, which we estimate at 6 per cent for Romania and Bulgaria, and 7 per cent for Serbia," said the chief economist of Alpha Bank, quoted by Mediafax. Alpha Bank's estimate points to a contraction of the private consumption in Romania, from 9.5 per cent in 2008 to 3.7 per cent in 2009 and 4 per cent in 2010. The growth of the credits will also slow down to 20 per cent in real terms already since the end of this year and will decrease more, to 15 per cent in 2009. The past year, the loans to firms and population advanced by 51 per cent. "We expect in the last quarter a dramatic decline of the growth of credits. The mortgage loans which have been our pride until recently, will be affected even more than the average of the system," Massourakis added. "On another hand, you will not have the current account deficit and the inflation of today. Everything will slow down," he added.

The banks in abeyance

The credits are blocked psychologically in Romania, and have ceased not because of the Norm 19 of the National Bank, but because of the fact that the commercial banks await new norms likely to be adopted by BNR, Adrian Vasilescu, advisor to the governor of the central bank, declared at the same seminar. According to him, the current account deficit could fall from 13 per cent to 10 per cent in 2009. "I hope to stop at 10 per cent, because the deficit expressed the ratio between our consumption and our production," Vasilescu said, quoted by Agerpres. The same added that currently the American Government tries to avoid a social bomb, and the measures meant to support the commercial banks are intended to avoid such a situation. Vasilescu explained the causes of the appearance of the world financial crisis, generated by the crisis of the mortgage loans and of the subprime credits from the US and considers that the main cause is the "greed" of the people, and also the lack of prudence of the banks. This did not exclude a disastrous effect at social level in the United States, in the case in which, in order to recover the loans, the banks would shift to the forced execution of the debtors and said that these cannot turn into real estate agencies, in the moment when a client who took a mortgage credit comes and remits the key of the house, informing the bank that he cannot pay the installments. The same also presented the types of scoring applied by the American banks, in four stages. The top clients with big and safe revenues, the clients with sure and permanent revenues, the clients whose revenues may be assured, but they are not sure and permanent, and the poor for whom the doors of the banks are closed.

Outstanding loans of RON 2.15 bln

The outstanding loans in Romania have reached RON 2.15 bln (EUR 577 M) at the end of September, being 117 per cent bigger than in the same month of 2007, in the conditions in which almost three quarters are overdue in the case of the loans in RON. The firms and the population of Bucharest have, according to the data of the National Bank of Romania, the biggest overdue loans in the amount of RON 630 M. The Bucharesters and the firms from Bucharest are on the first place in regard to the volume of the credits which reached at the end of September RON 67.9 bln (EUR 18.2 bln), of which over two thirds are loans in foreign currency.

 

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Tags: credits loans banks alpha which romania economic growth bnr