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EDITORIAL - MAY - Risks and opportunities

596 afisari
By Cristian Cojanu
Risks to Romania's outlook relate mostly to the pre-electoral environment and external uncertainties, according a recent International Monetary Fund report, released at the end of its Article IV consultation with Romania. "On the domestic side, populist measures in an election year could negatively affect market confidence and undermine investment. On the external side, a deterioration in emerging market risk perception could trigger capital outflows, a depreciation of the currency, and a substantial increase in the external debt-to-GDP ratio.
Maintaining adequate reserve levels, a flexible exchange rate regime, and fiscal buffers will be key in mitigating risks,” the report emphasized.

Looking at the broad picture, the IMF pointed out that growth is expected to reach 4.2 per cent in 2016, “largely due to the one-off stimulus to consumption from the recent fiscal expansion”, and slow down to 3.6 per cent in 2017. “Improving Romania’s long-term growth prospects to close the gap with advanced EU countries will depend on maintaining prudent macroeconomic policies and advancing the pace of structural reforms,” the report added.
In an unrelated announcement, the central bank (BNR) has said that the foreign direct investment in Romania fell 12.4 per cent on the year to 775 million Euro in the first quarter. Last year, FDI in Romania totaled 3.03 billion Euro, up 25.3% from 2014.
After this brief look at the general economic context, let us remind you that Business Arena is hosting this year’s edition of its traditional Austria-Romania Roundtable Business Conference and Awards. The event will be an excellent opportunity for business people, investors and professionals to get together and share their views on important issues such as Romania’s development prospects, business environment and the availability of skilled workforce, in the presence of His Excellency Gerhard Reiweger, the Ambassador of Austria, and Austria’s Commercial Counselor Rudolf Lukavsky.
In a recent interview with Business Arena, Ambassador Gerhard Reiweger said: “Austria and Romania enjoy very strong and highly diversified economic ties, which are an important positive factor in the bilateral relations of our two countries. In the past 25 years, investment by Austrian companies supported economic development in Romania and created or secured a great number of jobs. Since the Romanian government is showing continued interest in attracting investment from abroad, the Austrian Embassy is happy to support these efforts through its Economic office which is staffed by the Austrian Federal Economic Chamber. We will be glad to stay in close contact with the Romanian investment agency in order to attract Austrian investments that introduce modern technology, support environment-friendly production and enhance Romania’s exports of internationally competitive products.”
Find more details about our upcoming business events, the latest interviews and opinions in this new edition of Business Arena.

The editorial is also available in our print edition.

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