The State has fewer and fewer means to stimulate Romanian exports, as the international financial institutions no longer agree with the use of fiscal incentives for exporters starting this year, the commercial policy actions are restricted by free trade agreements signed by Romania, and the National Bank’s exchange rate policy will solely pursue an inflationary decline, so that the exchange rate will be slower to progress.
Now that it has no leverage left from a practical point of view, the Government decided the only thing it can do is counsel exporters. The Cabinet will establish the Export Council under a public-private partnership to devise the directions for supporting exports.
“The Export Council is called to identify opportunity niches, and at the same time convey useful information to employers’ associations about the global and regional trends of the industrial relocations and evaluate costs and benefits of structural adjustments in line with prospective demand,” Eugen Dijmarescu, delegate trade minister on Wednesday said.
He feels the deterioration of the trade balance is a result of the constant competitiveness decline of the Romanian producers, of the lack of retooling funds and of an exchange rate aimed to boost exports.
The euro gained a lot of ground against the ROL last year, but the dollar stayed put, which affected those exporters collecting their bills in dollars. The exchange rate and a smaller profit tax for exporters used to be the main instrument to sustain exports in the previous year.
NBR has now announced the ROL is expected to appreciate in real terms over the next few years to allow the inflation to go down and narrow the gaps between the Romanian economy and the economies of the EU countries. The appreciation in real terms means that the exchange rate of the euro or of the dollar against the ROL will be slower to progress than the inflation.
“Economic growth can rely on three factors: domestic consumption, exports and investments. The appreciation of the ROL in real terms helps reduce inflation and boost purchasing power, but, on the other hand, discourages exports. We must find a balance between the current account deficit size and curbing the inflation. As long as the current account deficit can be funded, the ROL may appreciate in real terms,” Enache Jiru, state secretary with the Finance Ministry commented during a seminar organised by FinMedia.
The depreciation of the national currency against the euro starting 1999, which was more severe than that in Hungary, Croatia, Slovakia or the Czech Republic has not discouraged imports from the euro zone, Dijmarescu feels. Moreover, given the higher depreciation on the Romanian market, the products whose costs are expressed in euros and come from the four countries have gained competitiveness. vlad.nicolaescu@zf.ro