Romanian businesspeople unfazed by electoral year, predict significant growth

Next year holds two certainties in terms of business: first, 2004 will be a leap year, so the businesspeople will have an extra day to close deals and make money, and second, it will be an electoral year, which guarantees thrills related to the result of the presidential and the parliamentary elections.

Still, the investigation conducted by Ziarul Financiar about next year’s economic outlook points to a subtle, but nevertheless significant change in the way Romanian businesspeople think: even though 2004 bears a high political charge, the Romanian business environment is now mature enough to not be very concerned about it. Why a high political charge? The first and most obvious answer lies in the absence of Ion Iliescu from the presidential race; then, the relative erosion of the PSD (Social Democrat Party) political capital; also, the test awaiting the PNL (National Liberal Party)-PD (Democrat Party) alliance; and last but not least the electoral results that can be scored by PRM (extremist Greater Romania Party). So why are not the businessmen concerned? Because they show much more confidence and, far from the pessimism that has been a constant of the past decade, they even forecast significant growth in most operating sectors. In brief: 10% asset growth in the banking system; 50% increase for the leasing sector up to 2 billion dollars; an insurance market likely to exceed one billion dollars; a $1-2 billion growth for the constructions market that was worth $6 billion dollars this year; whereas modern retail is expected to climb 30%. Such increases are, obviously, accompanied by more communication, so that the telecom companies estimate at least 10% growth, up to 4.5 billion dollars. The computer industry (software and hardware) also expects to exceed the one billion-dollar threshold this year.

Rather sceptic than pessimistic, the analysts of the macroeconomic segment outline the dangers lurking in an electoral year which, together with the international events and certain domestic limitations, can drive Romania away from the targets assumed by the authorities: one-digit inflation, 5% growth and a ROL depreciation that should not exceed 6%.

Another two economic chapters worthy of a closer look are energy and consumption. The privatisation of oil, natural gas and electricity operators will certainly happen in the case of Petrom and part of the distribution companies. The emergence of fair competition in these fields will become an important catalyst for the activity of many Romanian companies, whether they are equipment consumers or suppliers.

Consumption, the last fear of Romanian authorities, will continue to grow. Some two billion dollars sent to the country by the Romanians working abroad will turn into household appliances or new buildings. Following this year’s 300% consumer lending jump, bankers expect the segment to double in 2004, whereas retailers predict TV sets and refrigerators will remain the top best-sellers, while the auto market will see its best year since 1989.

dorin.oancea@zf.ro