Even in the context of the global financial crisis, Romania could avoid dwindling investments due to the prospect of solid economic growth, but in order for this to happen, the economy needs to continue its transformation process.
"We must ask ourselves if a credit granted in Romania will be the first to be withdrawn. Do you first withdraw your money from a growing market or from one where there are problems? We are willing to continue to invest, and I don't know why others would think differently," says Eli Leenaars, a member of ING's Executive Board, who coordinates the group's retail operations in the Netherlands, Belgium, South-West Europe, Poland and India.
This year's economic growth, expected to stand at 9%, would therefore act as a "buffer" in case of a slowdown under external pressure.
"Liquidity constraints are not as strongly felt in Central and Eastern Europe. As far as we are concerned, the most important risk facing Romania is how the economy's overheating is corrected. The risk of a hard landing is still there, but it is precisely the financing constraints and the higher premium risks which could contribute to a more gradual slowdown of the economy," says the ING official.
The credit growth rate already showed the first signs of slowing down in July, while banks are in tight competition to attract deposits, given that financing from shareholders is harder to access and more expensive.
The NBR (National Bank of Romania) started strengthening its monetary policy as early as last autumn, precisely in order to slow down the extremely fast expansion of lending, which was fuelling higher consumption in comparison with the economy's ability to produce.
In case of a potential hard landing of the economy, which would also show in an abrupt exchange rate correction, Leenaars believes the private sector would be hard-hit, especially for clients who took out loans in foreign currencies, even though they earn their incomes in RON.
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