Economic analyses

According to the Central Bank Governor, next year the economy might grow by 1.5%, but most likely Romanians will be able to feel their living standard has improved no sooner than 2012. This is the price Romania has to pay for having failed to understand that, in terms of economic development, there are always ups and downs, and in times of economic boost everybody must save money for the difficult times.

“If we want to live better, we need to produce more and more effectively, to increase productivity, enhance innovation and the spirit of entrepreneurship, to be more coherent in our policies, to invest more and to consume more only if we produce more. Once we’ve done that, or at least while doing that, we can think of the distribution of these revenues, which needs to be balanced", said Mugur Isarescu.

The news for the coming period are not good: prices will go up and state salaries, cut in the middle of this year by 25%, will stay low. As for inflation, the National Bank of Romania has estimated an 8.2% rate this year, and 3.4% in 2011, up from 7.8% and 3.1% respectively.

According to the Central Bank Governor inflation rate could fall within the range targeted by the Central Bank by the end of the year, but the risk of deviation is still high.

“We are worried about the firm implementation of fiscal consolidation and structural reform measures. Both seem to be rejected by a part of the Romanian society. Prices have always caused surprises, so we can expect them to grow more than our estimates indicate. Up to the limit where imports ease growth pressure, there is always the risk of prices going up", said Mugur isărescu.



For 2011, Mugur Isarescu believes that exchange rates will stay more or less the same, as the Romanian currency, the leu, has a relatively stable and sustainable position.