Non-performing loans have been increasing in Romania since 2009 at an alarming rate in my view. The current level of 17.34% is high by any standard.
The next two graphs show that the credit/deposit ratio is almost as high as it was during the credit boom of 2008 while the NPL rate is at historical highs for Romania.
In the next ECONOMIA 19.11.2012 FLORIN CITU ADVISORY looks at this issue and at what are the implications for the Romanian economy going forward. Applied econometric research has shown that after a certain level NPL’s have a negative impact on credit growth. Is Romania at that level? Also, how sustainable is the current situation of increasing NPLs, more provisions and capital flight? Is the Romanian situation different? We look at all these questions in the report.
Florin Citu is the founder of FLORIN CITU ADVISORY , an independent economic research and consulting firm. More details will be available in English on our page soon. Until then please contact us at firstname.lastname@example.org