BNR governor Isărescu: Romania’s economy won’t crash. What did he say about inflation?


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Mugur Isărescu, the governor of the National Bank of Romania (BNR) has voiced his optimism on Monday regarding the evolution of the Romanian economy, also admitting some of the problems it is facing.

Economy is on the rise. If you believe the TV, everything should collapse in this country. It won’t crash at all (editor note: the economy). It is going forward,” Mugur Isărecu, said during the conference „Inflation in the past 10 years”.

However, the central bank governor pointed out that Romania does has some competitiveness problems as opposed to other states like Czechia, Poland or Hungary where it should not be the case, namely on agricultural products.

First of all these countries have stimulated the aggregate demand less. And this has been shown in the current account deficit. We have this deficit at 3-4%, close tot he limit (…) We cannot neglect that anymore. The economy is cyclic and it would be really bad that the downward phase of the cycle gets us with a high foreign deficit,” BNR governor argued.

According to the latest forecast released by the National Prognosis and Strategy Committee, Romania’s economy will rise by 4.5% this year, one point down as against the 5.5% estimated in July, up to RON 949.6 billion.

At the same time, Mugur Isărescu estimates that inflation in Romania will be down at the end of this year, explaining that a crucial role is played here by the oil price, considering that Romania is more sensitive to the foreign markets.

The shocks from abroad are seen in our economy more quickly than the ones due to the local economy’s rise. It has been seen through the oil crisis. For instance the oil price has been sharply downward: by only 10 dimes, but that will help us regarding the inflation. It will be visible in a few days”, Mugur Isărecu stated.

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