The Effects of the Crisis – part II
The latest signals regarding the economic evolution are totally unfavourable, and if the economic decrease will be below 10% in 2009, this will be due to the poor results from the last trimester of year 2008 (as a comparison base), than due to the economic turnover.
Given that the government does not have the tools needed to produce significant adjustments, the devastating effects of the crisis are going to appear in all economic sectors, having a major impact on the population also. Programs like „First House” or „First Silo” are favourable but they resemble to a glass of water on a arid land: they do not generate notable changes. Before is too late, the authorities should drastically reduce the unproductive budget spending. From the amounts collected by the state budget, which are already less and less, not too many return in the economy to create employment opportunities, consumption and economic relaunch. Unfortunately, I think these gestures are the ones difficult to make given the political context. This aspect is extremely serious and leads us, in my opinion, towards the abyss.
If in the first semester the financial system (with the exception of the automobile leasing companies) managed to mask the effects of the crisis, this will no longer be possible until the end of the year. What’s to be feared is that, during 2009, Romania became the leader when it comes to inflation among the European Union countries and came into second place in regards to the economic decline, which shows the magnitude and the aggravation of the crisis.
Although very disagreeable per se, the bankruptcies of companies significant in size will clean the economy of players with bad performance that create obstructions. The banking system will be aided in this way to get rid of the bad loans that are rolled from some months now. Anyway, the economic outbreak will be generated by the evolution of the advanced economies, where so far the signals are not convincing. The only signal truly positive that has to be taken in consideration is the evolution of China, which already meets a launching that will enable the country to become the engine of the world economic revival.
Dr. ec. Adrian Crivii, MAA, FRICS