Private credit remains frozen in March

Private credit continued to contract in March, even seeing a record decline for the last few years, by one billion euros or 2.6%, while clients left without liquidity started to dip into their savings. However, the credit taken out by the state (via the central administration or the local authorities) continued to go up at a fast rate, marking an 18% rise in March, to 29.3 billion RON (equivalent to 6.9 billion euros), according to data from the NBR (National Bank of Romania). The Treasury is borrowing aggressively from the interbank market, in order to cover last year's huge budget deficit. Both companies and the population saw declines in credits taken out in March. Non-government credit fell to 202 billion RON (47.8 billion euros) at the end of March, with equal shares from companies and the population. Banks are now lending less than the total value of instalments that clients pay back on a monthly basis, so the overall volume is seeing declines. "Interests are down, banks have become more eager to give out credits, things are already starting to stabilise. April could bring about a revival, because several banks have come with offers and promotions for credits," says Ionut Dumitru, chief-economist of Raiffeisen Bank.