Crisis evolution in Romania
If in the third quarter of 2008, the GDP growth rate was 9% compared to 2007, and in the fourth quarter of 3%, the trend will be most likely negative in the first quarter of 2009. I reckon that the decreasing trend of GDP in the last two quarters shall be of 10-12 percents, which shows that the Romanian economy has constrainedly landed, in two quarters, from an unsustainable high level to an intolerably lowered level.
I think that, unfortunately, we shall face a significant decrease in the second quarter of 2009, too. Romania will enter a deep crisis, whose effects we all feel in the coming months. The economic situation worsening and falling demand cause less companies to have financial situations allowing them access funding, without mentioning the high cost of it.
After the agreement with the IMF, which will help to improve the financial situation, respectively increasing confidence and reducing the costs associated to funding, and after balancing the budget with EU funds, there will be created, in the last period of this year, the possibility of halting the increased decline we are witnessing today.
In 2010, within an optimistic scenario, we shall assist to the re-launch of the Romanian economy, and this taking into consideration the developments in terms of a favourable global economy.
A good chance for a quick revival of the economy is attracting EU funds. It depends exclusively on the competence of the authorities and the transparency of the process, providing the potential to boost strategic areas and economy, in general.
In this period of economic and financial difficulties, to attract these funds and those of other financial organizations (World Bank, EBRD, EIB) may represent two major advantages:
- there are cheaper sources that can boost big infrastructure projects and major branches of the economy;
- these create jobs, that is sources of budgetary income.
If the pronounced decrease in GDP was due mainly to decrease in real-estate and the retail, Romania’s exit the crisis may take place only with the reopening of investments (both public and private) in the real economy, not in consumption.
There shall be supported by funding and fiscal policies the companies that surpassing the crisis, will contribute directly to improving the employment situation, which is of the budgetary employees and the pensioners.
Dr. ec. Adrian Crivii, MAA, FRICS