Garanti Bank, one of the most dynamic banks on the local market, estimates that the growth rate of the gross domestic product (GDP) could reduce speed in 2018, to 4%, from 6.5% in 2017, mainly due to a slower pace of industry and trade connected to a possible economic deceleration in Germany and Italy, two of the top 3 countries where Romania exports.
According to the bank’s latest Macroeconomic Report, industrial capacity increased in the last quarter 2017, above the post crisis average, and the main industries to advance should continue to be, as in previous quarters, car manufacturing, machinery and electrical equipment.
In terms of inflation, Garanti Bank estimates that this indicator will increase, with a new peak most likely to be reached in the first quarter of the year, while the yearly average could register a jump, from 1.3% in 2017, to 4% in 2018.
Subsequently, Garanti Bank anticipates the National Bank of Romania (NBR) will act upon the rising price pressure and operate several hikes in 2018. Additionally, the bank expects the Central Bank to operate further rises of the monetary policy interest rate, which could reach 2.75% this year. NBR has already decided, during the first monetary policy meeting this year, to increase the key rate to 2%, after keeping it unchanged since mid 2015.
The current account deficit continues to widen but it should not catch too much speed, as wages’ growth should be slower in 2018. The larger deficit which is accompanied by a possible investment climate deterioration may lead to depreciation pressures in 2018, pushing the EUR/RON parity to 4.78 by the end of the year.
As lending has been picking up, exceeding the euro zone average by end of 2017, Garanti Bank estimates that in 2018 the pace should be sustained. The bank expects an increase in lending to companies and a moderate advance in consumer lending, with some guidance from the Central Bank to the banks not to increase household indebtedness.
About Garanti Bank Romania
Garanti Bank is part of the financial-banking group Garanti Romania, which brings together Garanti Leasing (the brand under which the company Motoractive IFN SA operates) and Garanti Consumer Finance (the brand under which Ralfi IFN operates).
Garanti Bank is held by Turkiye Garanti Bankasi AS (TGB), Turkey’s second largest private bank. TGB is a universal bank with leading presence in all business lines. The bank serves more than 14.5 million customers in corporate, commercial, SME, and consumer segments offering fully integrated financial services. The Spanish financial group Banco Bilbao Vizcaya Argentaria (BBVA) is the majority shareholder of TGB.
Garanti Bank Romania offers a series of quality products and services for all business segments: retail, SME and corporate.
Present in Romania since 1998, the bank has developed a solid portfolio of clients and expanded its national presence through branches and alternative channels, reaching an extended network of branches and intelligent ATMs that can be used by anyone, not just bank customers, for transactions with or without cards.
In July last year, Garanti Bank was awarded by world-renowned magazine Global Finance, as “Best Consumer Digital Bank in Romania”. The distinction was granted within the “2017 World’s Best Consumer Digital Banks in Central and Eastern Europe Competition” and it is the 10th award that Garanti Bank receives from Global Finance in the past nine years.