Romania, ‘20 years of unbalanced economic growth’

During the last 20 years, Romania has had an unbalanced economic growth, and this could reflect in the next two decades as well, Mugur Isărescu, the governor of the National Bank of Romania, said.

‘What could generate economic growth in 2011 and under what conditions? You might say sheer luck, pure coincidence. Economic growth is actually a work force synthetic product. ‘

‘Essentially, national revenue comes from labour force and productivity. Romania has had an unbalanced economic growth for 20 years, consisting of small demand and big supply. We can’t even foresee a different type of economic growth for the next 20 years’, Mugur Isărescu said.

Consumer stimulation, ‘a bad idea’

In an expert debate, governor Isărescu highlighted the fact that the loan based economic growth is not a practical one.

‘This type of economic growth is not feasible socially, politically, or economically. A country cannot loan an endless amount of money for ten years, and then have a ten year drawback, and so on’, Mugur Isărescu stated.

According to the NBR official, consumer stimulation is a bad idea, and it would be better if Romanians worked to raise production, highlighting that Romania needs a long term economy, with three important characteristics.

‘The National Bank of Romania has invested me with the powers to tell you unbendingly that we need a long term economic growth. I believe three things must be completed: stimulate work, stimulate work and stimulate work. If we complete the three, economic growth will be sure to come. I do not believe in a no-way-out-disaster scenario. Investments should stimulate growth’, Mugur Isărescu asserted.

Translated by: Tudor Ciocănel

MA Student, MTTLC, Bucharest University