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February 1, 2023

Romania risks missing ‘train’ of investment money, Dijmarescu says

The money available for investment tends to move very fast to developing countries, mainly BRIC (Brazil, Russia, India and China) and Romania has not made a lot of progress after the revolution and risks losing this ‘train’, said Eugen Dijmarescu, President of the Bank Deposit Guarantee Fund of Romania, Evenimentul Zilei daily reports. ‘I’m afraid we may not be able to catch this train, or, if we catch it, we may be travelling on the last carriage’, Dijmarescu told a business forum in Bucharest yesterday.

The official said Romania was not in a good situation, as ’over 20 years after 1989, we are speaking of government intervention more than about what needs to be done’. According to him, currently, the business environment still expects state aid in order to function. Dijmarescu also said that, according to the forecast, the BRIC developing states will match the euro zone GDP in about 40 years from now, because they grow really fast, meaning that ‘in the future, we will be speaking of those countries’ currencies just like we are now speaking about the euro and the dollar’.

Still not ready for euro

Romania will not be ready to enter the euro zone in 2015, but there is nothing wrong with waiting for another year or two, American economist Nouriel Roubini told the economic forum. In his view, it’s always better to have a slower and safe evolution than to have regrets afterwards, Mediafax informs. Roubini also says he does not rule out the possibility that some weaker states may be removed from the euro zone before 2015, as some of the more populist politicians will probably try to go get out and go back to national currencies in order to increase competitiveness.

About the economic situation, he thinks the Romanian economy is making a slow, U-shaped recovery, just like the developed states, although after a recession a more robust, U-shaped growth is usually expected, pointing out that the countries in the region which continue structural reforms will not be affected by developments in Greece, Mediafax notes. Roubini says the tough measures adopted by emergent states – Hungary and Romania – are paying off, even if a few more adjustments are still needed and that some other countries are facing inflationary pressures with electoral circles also closing soon. The economist also noted that, in Romania, almost half of the population consumption basket is represented by food and energy and the option of the central bank to keep the key-interest rate unchanged is the most appropriate monetary policy choice, because any moves in one or another direction would stimulate foreign capitals even more or would enhance inflationary pressures.

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