Global financial crisis has already spawned major fatalities worldwide and affected thousands investors who watched their portfolios shrinking drastically. In Romania, the first manifestation was in the capital markets, but its effects start to spread on several levels of economy.
Indirect link between stock market and consumers
The consumer - the dictator of the economic growth in the past years – is still living moments of glory in Romania. “Seen from distance, in a weekend day, in any hypermarket in Bucharest, it seems shocking that the shopping spree continues, almost the same as before” said Alex Stoian, partner with Prognosis.ro project.
He gave the example offered by the political figureheads in our days, “the attempt of slashing budget for 2009 by burdening it with salary growths which it is impossible to bear in the actual context. It takes time for the impendency and its subsequent materialization of the crisis to be felt”, he said.
Marius Pandele, Head of Research with Vanguard, says the consumers are likely to feel the effects of the dramatic declines at the stock market if the companies floated at BSE would manifest a higher level of dependence upon the funding via capital market.
“In a situation of this kind, companies will face major funding problems, which would affect consumers as well, sooner or later, especially if they serve companies in difficulty,” Pandele added.
Meanwhile, the outlook on national currency is not positive. Thus, Ovidiu Fer, analyst at Wood & Company says this will trigger repercussions on consumptions, especially on imported goods.
“Moreover, I think the expansion of consumer credit will temper down. Therefore, I think the consumers will be affected. Yet, this has nothing to do with the problems in Romanian economy and not necessarily with the slumps at the stock market,” said O