Are Romanian authorities cognizant of relapsing in the doldrums?

28 ianuarie 2012 • All, General, Macro, Media, Miscellaneous

Listening to the presidential speech backed by the chorus of economic advisors, one can honestly doubt if the Romanian authorities are cognizant about the imminent relapse in the doldrums.

The current protests should have generated an urge to come up with fresh ideas and actions to push ahead for economic growth and job creation.

The easy path followed by the authorities was to boost only the efforts for a better public imagine and to avoid tackling the real issues.

The main propagandistic hook rests with the 2011 growth figure which, despite being only due to extraordinary agricultural production and to a technical upswing after two years of deep contraction, known in the markets as the dead cat bounce, is promoted as a great achievement due to the past economic policies.

The internal devaluation, experienced by Romanians is an economic failure. The way it was implemented was extremely sloppy. The massive cuts in salary and pensions can be explained simply by an initial procrastination of the economic decisions due to the election pressures. The subsequent VAT hike not only was an uninspired choice of an increase of a key tax in the middle of a recessionary period but also its timing was “perfectly” positioned at an economic inflection point in such a way as to postpone the recovery by another 6 months.

The growth claimed by Romania for 2011 was not accompanied by the creation of new jobs, a perfect “growth recession”. Despite the fact that Romania has a great economic potential for growth, the “new Romanian normality” under the current mix of locally promoted macroeconomic policies seems to be one characterized by low growth and slow job creation.

For 2012 the Romanian authorities should be less complacent and move swiftly in relaxing the monetary policy by abruptly decreasing the intervention rate and reducing de minimum reserves for both the local and the foreign currency, removing the hurdles imposed by the new credit regulation, decreasing the taxes and pushing faster for investments via a Triumvirate (troika) arrangement: State – Foreign private interests – Local private interests.

 image from http://www.martin-munoz.com/recent

 

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3 Comentarii

Lavinia
29-01-2012 la ora 3:54 pm

Fara deprecierea leului personal nu cred decat in bagarea mizeriei sub pres, incetul cu incetul, adica ce se face si azi, sperand ca se va evapora de la sine, si pe putinul care va mai ramane nu-l va vedea nimeni. Dar mizeria se va reintoarce la o data ulterioara impotriva tuturor, mult mai puternic :). Eu percep ca Romania a fost si inca mai este in criza de balanta de plati, din cauza unor preturi macro aberante, si pana cursul de schimb si ratele de doanda nu se adjusteaza la alte niveluri, competitive in contextul nostru, nu cred ca se poate vorbi de revenire economica in Romania, nici daca vad 10% crestere de PIB, doar de pacaleala pentru care urmeaza sa facem plata din plin la o data ulterioara. O sa simtim din plin entropia pe viu, pe propria noastra piele :)). Si azi o simtim, dar se va acutiza daca nu avem taria sa marcam niste pierderi in perioada asta, si s-o luam de la capat cu alt model, alt portofoliu de strategii.

ThinkAgainRo
29-01-2012 la ora 4:21 pm

Dragă Lavinia, tu nu mai scrii nimic,decât comentarii pe blogul zeului tău Isa?

Lavinia
29-01-2012 la ora 11:09 pm

TA, peste tot dau de tine :)) Culmea, dar inca putin si-mi era si dor.

Nu, sunt in vacanta de la scris pe blog. Nu prea am nici timp in exact perioada asta, nici chef, si despre ce as putea sa scriu in perioada asta (ca n-ar trebui sa aloc extra timp), adica cu ce-mi bat capul concret, cel mai probabil n-ar interesa pe nimeni.

Da, n-am ascuns niciodata ca Lucian Isar e My Idol. Probabil e din cauza lui Mirror System. Si chiar il promovez cat pot, pentru ca sunt satula de tot felul de struto-camilo-ganditori care viseaza uitandu-se la bec, ferm convinsi ca un grafic n-are nici o impoirtanta in viata, si maretia creierului lor poate cuprinde ara nici o problema complexitatea realitatii si poate emite teorii despre orice. E suprinzator cum oameni care chiar isi bat capul au atatea necunoscute, si se mai si inseala din cand in cand, dar visatorii le stiu si le inteleg atat de bine si de usor pe toate …! 🙂 Ma bucur ca scrie pe blog, in sfarsit mi-am gasit si eu o sursa foarte aproape de inima mea, cu care sa ma delectez cand ma apuca cheful de citit chestii pe net :).

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