33.2 C
August 7, 2022

EBRD foresees 2.4 pc economic growth with some crediting risks

Romania will have this year an economic growth of 2.4 per cent, EBRD experts estimate, mainly driven by export and internal demand, with the main risks being in the crediting sector, because of bad loans and the reduction of cross-border financing by foreign banks. The prospects of economic increase are limited by the difficult situation of the euro zone, according to the European Bank for Reconstruction and Development (EBRD) Regional Economic Prospects report, released yesterday. At the same time, the high level of bad loans, above 20 per cent of the total volume of loans, and the continuation of the process of cross-border disintermediation by foreign banks might hamper growth prospects on a short-term, by limiting the recovery rate of crediting, EBRD warns. The bank estimates that the Romanian economy advanced by 2.5 per cent last year, after a growth rate of 2.8 percent at 9 months, driven by exports and agriculture. EBRD invested last year EUR 510 M in Romania, participating in 32 projects. EBRD investments in Romania amount to a total figure of EUR 6.4 bln, in projects worth a cumulated EUR 20.3 bln, according to the bank. The Romanian economy advanced by 4.1 per cent in Q3, the fastest advance in the last two years, supported by exports and a good agricultural crop, according to authorities.
The latest report also said that cross-border deleveraging appeared to have intensified again, most rapidly in several central Europe and Baltic countries (CEB) and in south-eastern Europe (SEE), a factor that was delaying a resumption of credit growth. The report did point to a welcome increase in local currency lending in a number of CEB and SEE countries, including Hungary, Poland, Bulgaria and FYR Macedonia. In these countries the availability of foreign currency credit had been hit by the deleveraging process, while local currency credit had moderately grown.

Related posts

Business Forum in Bucharest on November 13, 2012

Nine O' Clock

Deloitte study: Housing in Romania, among the cheapest in Europe