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April 23, 2021

Deutsche Bank: Romania, worst economic performance after Greece in 2010

The National Bank of Romania won’t cut the key RON interest rate to boost a surge in economic growth for fear of the inflationist impact created by the July rise in Value Added Tax (VAT), and Romania has the worst economic prospect save for Greece’s, analysts with Deutsche Bank, Germany’s strongest bank, say. A recent report reads Romania is facing the prospect of worsened economic data on account of the fiscal austerity measures in effect since July, while the majority of the countries in the region are moderately recovering from the crisis.

Also, German analysts maintain that the threat of a new non-confidence motion in Parliament and the recent dismissal of six of the 12 minister-strong government is not going to boost investor confidence. Further more, they think the Boc Government may not survive a new motion, which means early election should not be ruled out. Radu Craciun, investment director at Eureko Pensii and a senior economic analyst, has been advocating for some months now that the BNR should assume a role in economic rebound by lowering the interest rate.

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