Analysts: Foreign deficit must be lowered to 10% of GDP
„The question is if the deficits are still sustainable under conditions in which we assist to unprecedented turmoil on the international markets, marked by a liquidity crisis and more expensive financing”, underlined Dumitru.
„We have an excessive deficit starting with 2004. The fundamental factors are linked to the real convergence. We cannot adjust it below 10%. We have a rigid situation. We can push it down to 10% relatively easy, but to drop it below this level means we must give up convergence. A deficit of 8-10% of the GDP might not create problems and it would allow us to develop”, added director of research department of Raiffeisen Bank.
Still the risks for the commercial balance remain and we could expect a deterioration because our main partner, the euro zone, does not feel too well. We expect to see a slowdown in exports to the euro zone”, Dumitru also said.
But we cannot expect that this reduction will be achieved in one year alone”, Lazea also said.
Romania could be affected by a slight deterioration of its commercial balance and a slowdown of exports, under conditions in which there are fears that the euro zone, the main commercial partner, will enter recession, the newspaper reads.
Given that, at present, the exchange rate balanced level is close to the level on the market, Nicolaie Chidesciuc appreciated that a drastic depreciation is less likely.
As well, he said that, even though the real appreciation trend exists, it is likely that, in the future, some „exchange rate depreciation episodes” will appear.
According to some analysts, the lowering of the current account deficit from some 12% to 10% of the GDP would suppose an exchange rate of some 3.8 lei/euro on a period of some 1-2 years.
Even though the production capacities created will subsequently feed exports, foreign investors will apply pressure on the current account deficit at the moment when they will start to massively repatriate the achieved profits.