The National Bank Governor, Mugur Isarescu, has presented the yearly report for 2017 on Friday. Isarescu said that the economic growth was high, in the context of two consecutive years of fiscal stimuli and increasing earnings, while the foreign imbalances are growing.
“This expansion of imbalances shows the consumption was above the economic potential. All through the 2015-2016 period we had negative inflation, not deflation, as we did not register economic decrease,” the BNR Governor said, capital.ro informs.
Other issues explained in Isarescu’s speech:
- In 2017, the investments started to contribute to the economic growth;
- On the labour market, the wages have grown due to tensions. The wage growth stimulated economic growth, but the impact was not favourable in regard to inflation;
- We have no elements to show that the BNR monetary policy stimulated economic growth or the increasing inflation;
- The auto industry is the driver leading to higher industrial output;
- Increase in consumption and imports were reflected in the variations of the exchange rate. We have to gradually return to balance. Otherwise, we will not have low inflation and controllable external balances;
- The trade balance is deteriorating on all components. We need to be careful, we can’t produce as much as we consume. Until now, things have been under control;
- The National Bank has issued RON based on foreign currency, covered in foreign currency or in gold. The net BNR reserve has been constantly growing;
- If banks cannot grant credit without risk, this means our net reserve should be capped, we have liquidity on the market;
- An important part of the reserve is managed by the Finance Ministry;
- The gold placed at the Bank of England is ours, it is at our disposal at any time. An important part of the reserve is kept in gold coins, the standard gold is kept as ingots.
BNR profit up by 50pc in 2017
BNR registered a net profit of over RON 186.7 million in 2017, up by 49.8% against the previous year, the report reads. By law, 80% of the net revenues go as state budget incomes, i.e. RON 149.372 million.
“Out of the profit at BNR’s disposal, amounting to RON 37.343 million, a share of almost 60% was set for increasing the statutory reserves (RON 22.406). The amount of RON 14.937 million, left after the distribution in 2017, is to be distributed in 2018, by law, for: own sources for investment funding, the employee benefit fund, reserves available to the Board of Directors,” BNR informs.
In 2016, the BNR had a profit of RON 124.636 million.