Central Bank sees Romania's economic growth robust

Central Bank governor Mugur Isarescu said Romania's economic growth is robust and sustainable

Central Bank sees Romania's economic growth robust

World Bulletin / News Desk 

Romania's economic growth is robust and sustainable and its fiscal deficit is back in the comfort zone, complying with European Union norms while inflation has reached historical lows, central bank governor Mugur Isarescu said on Thursday.

Isarescu told a Euromoney conference on southeast Europe in Bucharest that Romania must now focus on structural reforms: "To underpin the viability of the economy is very important."

"Inflation is at historical lows," Isarescu said. "And we are going to have also negative growth, not deflation but negative growth (in) CPI, for the next few quarters."

On May 6, the central bank surprised markets by shaving another quarter point off its benchmark interest rate to a new low of 1.75 percent - still higher than rates in most other EU states, where some are negative.

It also cut its inflation forecast to 0.2 percent this year from 2.1 percent, as a sharp cut in value-added tax took effect.

Isarescu said non-performing loan levels in the banking system are still high and banks still risk averse.

He warned that large movements of capital from external factors could impact the local leu currency.

Earlier in the day, Prime Minister Ponta said adoption of the euro currency was a positive and sustainable goal for the country which aims to join the euro zone in 2019.

Earlier this year, Isarescu said Romania had a problem implementing structural reforms and meeting the real convergence criteria for joining the euro zone by the target date.

Last Mod: 04 Haziran 2015, 12:17
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