The increase in the cost of foreign loans, which can already be seen, the restricted access of local banks to financing from abroad and the slowdown of the economies of the main trade partners are the main problems Romania could weather in the current unfavourable international climate, says Juan Fernandez-Ansola, the regional representative of IMF for Romania and Bulgaria.
He says Romania has not taken any steps over the last few years that would help it overcome such a predicament, especially tax-wise, and is now largely dependent on the unpredictable international developments.
"In our base scenario, we estimate economic growth will continue, though I would not be so certain that the economy will remain so dynamic over the next four quarters if international social tensions continue or worsen. The risk is that, if the economy slows down from 6% to 3% for instance, you will shortly find yourself without the budgetary revenues you were counting on, whilst the deficit may quickly exceed the 3% of GDP cap," Ansola told ZIARUL FINANCIAR in an interview.
He says the slowdown of economies in the eurozone, the main trade partners, will also affect Romania, which "cannot remain immune, because it is not isolated from the rest of the world." He feels that a decline in exports would be hard to compensate by boosting domestic demand without exacerbating domestic imbalances, which are already significant.
"Romania would be really pressured in case of a very, very severe slowdown in the eurozone. Still, our base scenario does not include such a development. We do not anticipate recession, not even in the US, but we might see a significant slowdown of the economic growth there."
The IMF official says tensions on the international markets come at a very bad time for Romania. "Romania cannot afford the luxury of saying 'foreign turmoil came at a bad t
