Stiri	Stiri afaceri	Stiri companii	Evenimente de afaceri

Analysts : We avoid recession but we need a weak leu and an agreement with IMF

Public investments and agriculture will be the main factors to decide if we enter or not recession this year, a weak leu will have rather positive effects, and in order to obtain the necessary funds for investments in Romania we need to sign an agreement with IMF, financial analysts consider.

The evolution of the economy, of investments, of finances, of the exchange rate and if Romania signs an agreement with IMF are the main questions the Romanians expect an answer to. Maybe the main question connected to the evolution of Romania this year is connected to the road of the economy : will it continue its road of growth or will it get to recession ? Adrian Mitroi, general secretary in the CFA Romania - Chartered Financial Analysts, considered that Romania wouldn't get to recession : » I think that it would be about a growth between 0 and 2%" he said. The opinion is shared by Liviu Voinea, executive manager of the Group of Applied Economics who considers that this year Romania will be spared the recession with the condition that public necessary investments, part of the GDP to achieved. " If this condition is achieved, Romania could reach a growth of 2-3%" he said.

The most pessimistic image as regards the evolution of economy for this year was given by Moody's who estimated a negative value of the index. At the level of local analysts there are voices who support the idea that the economy could go to that evolution. Thus, Alexandru Chidesciuc, the head economist of ING Bank Romania considers that under the conditions where the agricultural year would be a bad one, we could have Romania get into recession. As in the case of Moody's the term " recession" is interpreted as a decrease of the economy in 2009, against 2008. But if we speak about technical recession, meaning the drop in the GDP for two quarters in a row, then this year is expected to be in recession, Adrian Mitroi draws our attention. The most optimistic estimates, between which the one of the analysts of the BCR aims at the economic growth of 4-5% for 2009. At the same time, the two parties in the government PD-L and PSD consider as possible an economy growth of 3% for 2009.

Investments will drop in 2009 to a lesser importance in the deficit of current account The evolution of foreign direct investment which represented the main financing of the current account deficit of Romania is another enigma of 2009. Another question connected to 2009 is if it would be good for Romania to sign an agreement with IMF to get the funds that would help it to make the reforms proposed. As regards foreign investments, Adrian Mitroi considers that it is questionable if new investment in the country such as Voestalpine and others would come. " The crisis would determine the investors to make their investments more efficient and to make a drastic evaluation of the destination markets under the report of offered profits,costs, etc" considers the general secretary of CFA Romania.

He mentioned that you need financing for investments, whose level dropped drastically over the last period. In exchange, investors who are already on the market will have no choice but to stick and continue their investments, if not in the same rhythm. Adrian Mitroi considers that the level of foreign direct investments, seen as the main source of financing of the deficit of current account will drop this year in an accelerated rhythm under the level of 56.5% of the current account deficit, as it represented in 2008.

Given the low level of foreign direct investment expected for 2009, Liviu Voinea considers that they could not be the main means of financing the debt of Romania, estimated by economists at 40 billion euros and including the external debt of Romania, the budgetary deficit, the current accout deficit, a part of the external debt on a long term. The executive manager of GEA considers that the only way in which the external deficit of Romania could be financed would be the signing of an agreement with the IMF. « Signing a contract with the IMF is compulsory now, when there is no other external financing source. Moreover, the agreement would include some criteria in using the funds, and Romania needs the discipline" Voinea considered.

The good news that we could bring for 2009 would be the drop in consumption, which would lead to the diminution of imports and of the current account deficit. Adrian Mitroi from CFA Romania relies on level of the current account deficit of 10% of GDP ( against 13.5% as it was estimated for 2008).

The prognosis of the governmental programme for current account deficit for this year is 11% and Liviu Voinea considers that it could drop even under this level, function the value reached by the GDP."If the economy grows more slowly than in the estimates, the share of the deficit in the GDP could be under 10%" the GEA representative said. Romania would have an external deficit, hard to finance when the financial markets are frozen. So, the question is when they could start to circulate at normal level funds from the European market to the local market and from the local banks to the population. Radu Craciun, the investment manager at Interamerican Pensii estimates that the activity of the financial markets could be made in the second half of 2009.

Reaching the level of 4 lei/euro will calm down consumption

The evolution of the exchange rate, to which financial stability is connected is another expectation for 2009. The ING Bank Romania economists, those in Unicredit Tiriac and Raiffeisen Bank estimate reaching the level of 4 lei/euro and an average level of the rate superior to that of 2008. According to Adrian Mitroi, the depreciation of the leu up to that level could be necessary: " The depreciation of the leu, although with a negative impact on the financial stability of the Romanians debtors in euro, would be a necessary evil for the discipline of the population in general and of the governers which would lead to the calming down of the consumption." The central bank could be «stuck» with this level, trying to defend a level of the rate of up to 4 lei/euro? Mitroi draws the attention that all interventions by BNR at hard currency level are very expensive, thus diminishing the hard currency reserve. On the other hand, to try and keep a rate under this level, under the conditions where all currencies fluctuate, it means to send a signal of uncertainty in the market.

 

Sursa: http://www.actmedia.eu

Tags: under level could analysts which deficit external financing account current would considers romania financial investments agreement recession mitroi evolution adrian economy growth bnr euro bcr ing

Articole similare