Romania's economy has all the ingredients to continue growing at a 5 to 6 percent yearly pace over the following seven years until introducing the single European currency, governor of the central bank (BNR), Mugur Isarescu said.
- Publicitate -
Isarescu said he bets on the country's growth potential, but warned about certain fiscal policy mistakes which could draw the country back several years and said he is worried over the dangers of populism. Both local and Parliament elections are to take place this year.
Isarescu estimated the economic growth to stand at 6 percent this year. The forecast institute gauged 6.5 percent. "Therefore recession is out of question," Isarescu assured. International capital markets were hit by recession fears at the beginning of the year after the U.S. economy, one of the strongest in the world, showed signs of weakness. The Bucharest Stock Exchange and the leu were also affected by the slump.
Romania's gross domestic product grew 6 percent in real terms over last year to 404.7 billion lei (121.3 billion euros), beating estimates. However, the country must not push the pedal of economic growth to the ground because it would affect the macroeconomic balance, the governor explained, adding the central bank is sweating to temper inflation, but current account, trade and public gaps remain a concern.
Inflation will curve towards the target in the second half of the year, Isarescu said. However, it is more important to control prices than to reach the inflation target, he added.
Romania needs a balanced mixture, Isarescu concluded, which would neither weaken the economic growth nor bring down the national currency and also, not fuel inflation.
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