These are halcyon days for Romania’s banks. As the country makes its final step towards membership of the EU, probably in January 2007, Romanian companies and households are finally enjoying the brisk economic growth rates that eluded the country in the 1990s.
The statistics say it all. Despite a sharp drop in GDP growth last year to 4.1%, down from a sprightly 8.4% in 2004, the economy is being driven by robust domestic demand. According to the latest figures from the National Bank of Romania (NBR), private consumption grew by 9% last year and investments increased by 13%. A recent note on Romania by HSBC says: “The rise in households’ expectations of future income [as Romanian salaries start to converge with west European levels] makes them more inclined to borrow.”
