Financial intermediation will make up 50% of GDP by 2014

The share of total loans granted to individuals and companies in GDP is to increase gradually by 2014 as a result of a rise in mortgages and company financing.

“This is not an optimistic scenerio. An optimistic but risky scenario which we may face, considering the aggressiveness of banks, is an excess of 50 percent of GDP by 2012,” said Isãrescu.

The central bank estimates financial intermediation to amount to 34 percent by the end of this year, from 27.1 percent at the end of 2006. “I personally see a 30 percent year-on-year increase in loans next year and in 2009,” Isãrescu added.

BNR’s Governor foresees a saturation of consumer loans, whose growth rate will slow, with lender attention focussing on the short-term mortgage segment.

“I have high hopes for corporate financing. This segment will provide the substance of economic growth in the near future,” Isãrescu explained.

Non-governmental loans rose 50.2 percent in August compared to the same period in 2006, to RON 122.09 billion (€36.59 bln), with the foreign currency component exceeding that in lei for the first time since March 2006. In August 2007, lei-denominated non-governmental loans worth RON 60.25 bln (€18.05 bln) were surpassed by those in foreign currency, which reached RON 61.84 bln (€18.53 bln).