High interest rates, gloomy outlook stifle bank lending in Romania
The stock of bank loans to the non-government sector in Romania increased by 5.5% y/y to RON378.8bn (€76.36bn) at the end of August, the National Bank of Romania announced.
After it reached 27.9% of GDP in August 2022, up from 26.3% in August 2019 before the COVID-19 crisis (supported by government subsidies to corporate lending mainly), financial intermediation in Romania plunged to 25.3% in August 2023 amid sluggish lending and high inflation.
The advance was mainly driven by forex lending (+19.0% y/y to RON120.5bn) while the stock of local currency loans edged up by only 0.2% y/y to RON258.3bn, roughly two-thirds of the total.
By the main types of customers and currency, lending to households (predominantly in local currency) edged up insignificantly by 0.2% y/y to RON172.3bn, the stock of loans to non-financial corporations advanced more significantly by 10.1% y/y (driven by the 28.3% y/y advance of forex lending) to RON189.4bn and the loans to financial non-bank corporations surged by 19.8% y/y to a still small RON17.1bn.
The latest GDP figures show that the eurozone contracted in the third quarter and looks like it will do the same in the last three months of the year, falling into a continent-wide recession.
Real wages are up in Russia, but thanks to inflation and subsidised mortgages, the middle classes are getting richer, while the poor are getting poorer.
Russia’s strong growth, driven by heavy military spending, has created growing inflationary pressure as the economy starts to overheat, the Bank of Finland institute for Emerging Economies (BOFIT) says in its weekly update.
In the most recent poll conducted by the Russian Public Opinion Research Center (VTsIOM), President Vladimir Putin's trust rating remained steady at 78.5%.
Ukraine’s leading investment bank Dragon Capital has cut its GDP forecast for Ukraine in 2024 in half to 4% y/y in anticipation of another year of war, The New Voice of Ukraine reported on December 7.
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