Loading ...Amidst the ongoing world financial crisis, Romania might have to put up with foreign companies repatriating their dividends from Romania and a deceleration in the demand for Romanian exports, Governor of the National Bank of Romania (BNR) Mugur Isarescu told Parliament on October 14.
“Given the existing distrust environment, BNR is foreseeing at least a slowdown in, if not a diminution in absolute terms of the capital inflows in Romania. Under the present circumstances, dividend repatriations are also likely to occur. Romania has so far benefited from the fact that dividends gained from foreign investment have been ploughed back into the Romanian economy to a very large extent,” said Isarescu.
The BNR governor said that in the case of increasing dividend repatriations by foreign companies, Romania could overcome the situation by boosting domestic saving sources and investment as well as by a switch from a consumption and import encouraging atmosphere to a labour and savings atmosphere.
“Because of the world economic recession, we are likely to witness a deceleration of the demand for Romanian exports. Romania has no products extremely sensitive to recession, such as high tech products. Romania’s exports are traditional products. For instance, steel is one of the products which a recession lead to a decrease in the demand for it, and the reaction of the Romanian steel maker of Galati has already emerged,” said Isarescu.
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