ROMANIA 2020: Banks are raising deposits and the government is barely covering the budget deficit

  • Editors
  • June 15, 2019
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We have put together an overview for one of the biggest markets of Eastern Europe, Romania.

  • The Ministry of Finance had four issues of government securities just in 2019 according to national bank (BNR)
  • National Bank (BNR) urges commercial banks to raise interest for deposits as they will allow less liquidity on the market – source
  • Commercial banks, including the largest Romanian bank, raises interest for deposits from 3% to 3,5% for 2 years and 4% for long term
  • Romanian external debt reaches 100 billions, meaning 68% of the GDP according to Ziarul Financiar
  • The Ministry of Finance contracts a 3 billion EUR loan in march 2019 adding to the 9 billion EUR loan from IMF contracted in 2009
  • Inflation is predicted to reach 4% in 2019 according to ZF.ro
  • Inflation will affect a large part of the Romanian population with ‘First Home Credits” that is predicted to reach the 7% increase from 5%
  • The ministry of Finance is looking into public system restructuring to cope with budget deficit and high salary costs in the public sector
  • Romania has one of the highest economic growth rate – 4,1% in 2018
  • Romania’s GDP — which is a measure of a national economy’s output, has increased at a real average annual rate of 4.6% over the past five years, driven by rising households’ incomes, low interest rates, and robust external demand, accumulating an impressive 25% advance in 2013-2018.- romania-insider.com
  • For 2019, the European Commission forecasted for Romania 3.8% growth, under the Winter Forecast, while analysts are even more cautious: Romania’s leading bank Banca Transilvania said in January it expected 2.8% growth, grounded on the weaker dynamics of the euro area (Romania’s main economic partner) and adjustments in internal economic policies after the robust fiscal stimulus of recent years. – romania-insider.com