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Bucharest
February 25, 2021
BUSINESS

Eric Berglof: Romanian economy might decrease by more than 4 pc in 2009

The Romanian economy might decrease by more than 4 per cent until the end of this year, according to Eric Berglof, the Head-Economist of the European Bank for Reconstruction and Development (EBRD), the Money Channel informs.

In an interview for the TV station, he mentioned that the figures for Q1 are worrying, yet he also mentioned that Romania is not the only country in this situation and this is why a greater involvement from behalf of the authorities and of the international financial institutions was required.

“I think that the figures of Q1 suggest that the decrease might be slightly higher. Nonetheless, we should wait and see what happens in the rest of the world. The only important thing is that we should try to overcome the financial crisis and to make sure that there is enough capital for refinancing and in order to grant solidity to commercial banks. First of all, Romania is not the only country in this situation. Unfortunately, the entire region is strongly affected by the world crisis and we saw, both in the last quarter of last year and in the first quarter of this year that production has significantly diminished, especially in the manufacturing field. It is a highly worrying situation, caused by the lack of credit and the decrease in the demand. I think it is a problem we must approach,” the EBRD Head-Economist Eric Berglof declared. On the other hand, Romanian banks, as well as others, must prepare for the increase in the number of non-performing loans, Eric Berglof warned. He claims that a stronger increase of these will be noticeable during Q2 and Q3, and therefore, banks must make sure that they have enough capital.

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