IMF report – Conclusions show that Romania has become a new and atypical growth model: through imbalances. Which will soon get to be paid
Romania’s macroeconomic imbalances have increased in the past year, and economic and fiscal policies have to change so that the population’s incomes and prospects of… Mai mult›
Discharging imbalances on RON exchange rate could start even this year. Analysts’ scenarios and BNR’s uncertainty
Analysts’ scenarios on the evolution of the exchange rate are rather prudent for the coming months, but severe for the beginning of the next year… Mai mult›
Interview with Fogh Rasmussen: “NATO’s role is to keep Russians out, Americans in and Europeans involved”
The text below is a series of fragments from the interview that former NATO Secretary General Anders Fogh Rasmussen gave to CRONICILE Curs de guvernare… Mai mult›
Romania ranked fourth in the second half of last year in the EU in terms of price increase in natural gas provided to the population,… Mai mult›
BNR minutes: Soft terms that Governor used for assessing serious problems. List of critical situations
The volatility of the new benchmark indicator for loans granted to the population, IRCC – which declined in May, despite the central bank’s control on… Mai mult›
Stimulating over-indebtedness by stimulating consumption: Overdue loans trigger warning signal – Map of debtors
de Adrian N Ionescu , 3.6.2019
The policy of stimulating consumption has also distorted the degree of indebtedness in the territorial distribution, and rich counties are competing with the poor ones in the ranking of outstanding loans rate, according to data from the National Bank of Romania.
BNR data indicate the increase in outstanding loans at a monthly rate of 1.1% in April compared to March, the highest level since October, reaching RON 7.8 billion.
The rate of total outstanding loans (population and businesses) climbed from 3% in March to 3.02% in April, according to a report by Banca Transilvania (BT).
The indicator launches this way a warning signal on the current trend of over-indebtedness, especially in the population category, whose loans account for 60% of total current loans of over EUR 164.6 billion, even though the indicator has declined by 17.1% compared to April 2018.
“We are expecting a gradual increase in the rate of outstanding loans in the short term, in the context of the economic post-crisis cycle end and the increase in financing costs,” wrote Andrei Radulescu, director of macroeconomic analysis of BT, in the report mentioned.
The counties with the highest rates of outstanding loans in RON are among the poorest: Botosani (9.5%), Caras – Severin, (6.6%), Mehedinti (5.5%), far above the national rate of 2.9%. Teleorman county is not missing from this ranking, with a rate of 3% of outstanding loans in total loans.
However, Bucharest is also present in the ranking (including Ilfov County), with a rate equal to that registered by the country, but also rich counties such as Sibiu (4.4%), Prahova (4.3%), Contanta (3.7%) or Timis (3.2%), which reinforces the idea that stimulating consumption has led to over-indebtedness.
- Map of outstanding loans in RON
- April 2019
- Country total
- Bucharest, including Ilfov
And while the presence of Vaslui county (3.9%) does not surprise, the score of Valcea county (4.7%) is a surprise. The map of the delayed debtors backs the idea that the appetite for indebtedness has contaminated both the poor and the rich.
Foreign exchange indications
Some poor counties with poor economic development, such as Botosani or Teleorman, and those with a developed economy (Timis, Bucharest – Ilfov), where companies have results that allow them timely payments of loans, are no longer in the ranking of counties with the highest proportions of outstanding loans in foreign currency.
Forex loans are mainly part of the companies’ arsenal, especially those with foreign relations. In this respect, companies have most of the loans, 57% of total current loans in April, of EUR 86.5 billion.
Otherwise, poor counties such as Harghita or Giurgiu, whose economy does not represent an excuse that companies would be the cause of payment delays, rank among the firsts in terms of rate of arrears in foreign currency exceeding the country level. Therefore, the population is again the cause for a large proportion of arrears.
- Rate of outstanding forex loans
- Counties out of total forex loans
- Note: yellow highlight represents counties also present in the ranking of outstanding loans in RON
*Over-indebtedness in foreign currency is also present in the population category, either as a result of the same increased government policy appetite.
Government measures gave this way the illusion of higher borrowing capacity, or due to long-term mortgage loans, committed before BNR’s campaign to discourage foreign currency lending.
Lăsați un comentariu
The new order on approval and selection procedures for insolvency practitioners is an important step to a very good direction, industry experts say. ANAF is… Mai mult›
Romania lost to Estonia in the final vote to get the non-permanent member position within the UN Security Council for the period 2020-2021. On Friday,… Mai mult›
Business internationalization / eMAG makes a step to entry five new international markets and targets a business of EUR 2 billion
eMAG hopes to get the opinion of the Hungarian Competition Council over the next two months for the acquisition of Extreme Digital, the market leader… Mai mult›
"At a distance from books": 85,000 teachers (one third of educational staff) are graduates of distance learning
Approximately 85,000 teachers are graduates of distance learning (ID) programs, Education Minister Ecaterina Andronescu said at a meeting with school inspectors from Caras-Severin County. The… Mai mult›
A book should be written or a movie should be made and sent to Viasat History about a treasure evacuated to Moscow, as it is… Mai mult›
Today, the European Automobile Manufacturers Association (ACEA) announced the status of commercial vehicle registrations in EU member states + EFTA in April and cumulated after… Mai mult›
The National Bank increased the inflation forecast for 2019 by 1.2 percentage points, from 3% to 4.2%. Also, the forecast for 2020 goes up by… Mai mult›
Emergency procedure at European Court of Justice for Romania’s question: Are MCV recommendations mandatory?
The Court of Justice of the European Union (CJEU) has decided that Bihor Court’s request to be discussed under the emergency procedure, which is a… Mai mult›
Government decides to increase external borrowing ceiling by EUR 4bn. It has consumed program resources for two years
The Government's agenda for Wednesday also includes the draft decision to increase the foreign loans ceiling for 2019 and 2020 by EUR 4 billion, up… Mai mult›
On Tuesday, the European Commission presented a series of policy recommendations on how Europe can shape its future within an increasingly uncertain and multipolar world.… Mai mult›
Meeting between Prime Minister Viorica Dancila and Chinese Prime Minister Li Keqiang: talks on a possible involvement of Chinese companies in PPP projects in Romania
On Friday, Prime Minister Viorica Dancila had a meeting with Chinese Prime Minister Li Keqiang, during which she stated her interest in involving Chinese companies… Mai mult›
So-called "Belina Law" was adopted. Opposition will refer CCR: it turns Belina Island into a fiscal paradise
The Chamber of Deputies adopted on Tuesday the bill that provides for a derogating tax regime, such as tax exemptions or reductions, for land and… Mai mult›
Deveselu shield is undergoing an upgrade process; the US provides alternative defence capabilities with THAAD systems
Aegis Ashore anti-missile system installed at Deveselu 99 Military Base will go in the next period through a previously planned upgrade process, the MApN announced… Mai mult›
How 2019 began: Investments, allocations by 78.5% lower than the same period of 2018. 21% decrease in co-financing for attracting European funds
The consolidated general budget recorded a deficit of 0.5% of GDP in the first two months of 2019 namely RON 5.2 billion, a "performance" only… Mai mult›
Romania's GDP exceeded Portugal’s in 2018: which has a population two times lower and a GDP/inhabitant twice as high
Romania's economy exceeded, at current prices in euros, Portugal's economy in 2018, a country with a population and a surface two times smaller as Romania.… Mai mult›