Current crisis not just fiscal, also concerns balance of payments

The current crisis is not just a fiscal one, but also one related to the balance of payments, if we were to think of a correct diagnosis, BNR governor’s adviser Lucian Croitoru said ay a seminar organised by the Eleutheria Centre for Analysis and Institutional Development yesterday, reports. ‘Many in the eurozone speak of states’ indebtedness. However, allow me to draw your attention on a different indicator – the investment position. If we take Romania, we have an investment position of -65.3 and a debt of less than 40 per cent of the GDP and the yield of bonds maturing in 2018 is 6.6 per cent. The USA have a three times higher indebtedness than Romania’s and much better bond yields,’ Croitoru explained. This means that investors are not worried about countries’ debts – he said – thinking that the investment position counts more than the debt to GDP ratio. The central bank official also spoke about the economic sentiment in the eurozone as well as Romania. ‘In Romania, the economic sentiment has been uncorrelated with the rest of Europe. Until the forth quarter of 2008, there had been a very tight link. In Q4 2008, the sentiment was still good, but in Europe it had been deteriorating since 2007 already. Economic actors in Romania underestimated the crisis’, Croitoru said. He continued by saying that a reversed uncorrelation had happened in Q4 2009. ‘The average economic sentiment was better, we were more pessimistic than the eurozone was and it remained like that until the last three months of 2011. We were out of step with the EU. Now we are back in line with the eurozone. If there are problems in the eurozone and the economic sentiment starts deteriorating there, it will also deteriorate in Romania,’ was the conclusion of the central bank governor’s adviser.

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