| WHAT SHOULD WE DO TO BOOST THE ECONOMY 17/06/2009 |
| (2009-06-17) |
| Last updated: 2009-06-18 17:49 EET |
According to Lucian Croitoru, an advisor to the governor of the Central Bank of Romania, exceeding the set target calls for new measures to carry on the program with the IMF.
At the same time, Croitoru has warned that Romania’s financing need is an element of vulnerability and it will stay high for years to come, because the agreement with the IMF generates the need for further loaning. IMF representatives have estimated a 44 billion Euro worth of financing that Romania needs this year alone. The downward trend continues, and forecasts say that in the second and third quarters the economy will depreciate as compared to the first three months of the year, when the contraction was 6.2% as to the same period in 2008.
Therefore, most likely companies will make adjustments to both prices and salaries, and the rate of unemployment might rise. ‘The economy is moving very slowly’ the central bank representative has also said, and economy analysts fear that Romanian industry will not start recovering sooner than 2010. The Secretary General of the Romanian Employers’ Association Cristian Parvan believes that, quote, ‘ we still have got resources that would allow economic growth, but they very much depend on the measures and resources that the state will take and allocate to revive domestic demand and consumption’, unquote.
For now, the number of companies that are unable to fund their activity is on the rise, as they have to pay for raw materials, utilities, salaries, taxes. But they have got no cash, what they’ve got is just a pile of unpaid invoices from various business partners that are in the same situation, reads the daily Jurnalul National, which titles: ‘The state seriously damages the health of the economy. Financial deadlock’. Under the heading ‘lower interest rates, but harder times’, another daily in Bucharest, Evenimentul Zilei, quotes Bucharest officials as saying ‘ boosting the economy depends on the resumption of loaning’.
For business to go up, the market must be trusted.’ Attending the meeting in bucharest of the employers associations members of the European Economic and Social Committee, Romanian President Traian Basescu harshly criticised the banks’ policy of maintaining high interest rates for loans, warning that in the medium and long run this could be translated into prejudices to the Romanian economy, and eventually to the banks themselves.
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2025-04-03
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