GM of Citi Romania: Tagging along the upward trend of capital market in Romania
There are enough reasons to trust this optimism that currently emerges within the business landscape in Romania, says Tibor Pandi, general manager Citi Romania and regional director for Romania and Bulgaria at Citi.
2014-07-25 13:28:53
The big picture delivered by the macroeconomic indicators speaks for itself. And not only this, as the local branch of the US-based financial group observes signs of strong recovery in bank operations, this along with the most significant achievement of the year half, the Electrica IPO.
Everyone first looks at the GDP growth as the key indicator for economy performances and in this context, the Romanian economy has outperformed the expectations showing in Q1 a GDP of 3.5 per cent which has been primarily driven by the revival investments in Europe and demand for Romanian exports. What it makes the composition of GDP different this time around is the moderate recap in domestic demand. "This is giving us ground for optimism. Today, many growth and confidence triggers are no longer available. In the recent and distant past, Romania based the economy growth on agriculture and exports, respectively, large inflow of FDI, mirrored in all economy sectors, salaries, demand and overall trust in economy (before 2008)," Pandi states.
The low inflation is also a significant factor as driver for economy growth, and this indicator may be good, with the amendment that, in a prolonged period of time, it may not be necessarily good. "We need to have some sort of inflation to a range of 2 to 3 pct signaling an increase in prices due to increasing demand. So, a moderate rate of inflation is good," Pandi states.
On the fiscal front, Romania compared to Croatia, Serbia, Bulgaria, with a deficit ranking at 2.2-2.3 pct in practically kept in check, is a sign of stability, according to the manager. "Even the situation at the North Eastern border, in Ukraine, doesn't really affect Romania, as the country is self-sufficient in terms of gas supply resources and the trade executed by Romania with Ukraine stands for less that 5 pct in the overall GDP. Romania has to look abroad to Western markets, linked also to the demand trends in US and China," Pandi explains.
Read the full interview in the upcoming edition of The Diplomat-Bucharest, covering the US-based companies' investments in Romania
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