Anaemic lending will further reduce consumer-spending appetite

The decline in the flow of new credits granted to the population by 75% in the first quarter of the year against the similar period of last year will further reduce the consumer spending appetite, which had already started to fall, according to the report on inflation of the NBR (National Bank of Romania). "The lending process, at least in the short run, is expected to remain anaemic, especially on the segment of credits granted to the population, and determine an even further decline in consumer spending, which appears to have emerged lately," the authors of the report say. Although it has given a clear relaxation signal, by a 0.5 % reduction of the key interest rate, the central bank stressed in its report that the revival of the crediting process could take some more time. The factors that could see lending continue to be low are the banks' persisting lack of confidence in the economy's short-term performance and the deteriorated perception on client risk, as well as a low demand for credits.