The domestic banking sector is capable of facing new challenges, which will undoubtedly not be long in coming, as all over the world we are witnessing a transition process of globalization, said Andrej Redulescu, chief economist of Banca Transilvania, at a conference organized by Finmedia.

We observe the fragmentation of economic flows between two blocs: Euro-Atlantic and Eurasian.

In essence, we are no longer talking about the globalization of efficiency, we are talking about the globalization of resistance or resilience, says Redulescu.

Why do we have this transition? Because after February 24, 2022, we witnessed the fragmentation of economic flows, everything that means economic flows between the two blocs: Euro-Atlantic and Eurasian. It is an all-out showdown between the United States and China, the world’s two largest economies, which at the end of last year had a combined GDP of more than $40 trillion. The US GDP was more than 26 trillion dollars, and China’s GDP was 18 trillion dollars, the Romanian economist explained.

The US is in a recession. They don’t want to admit it, but at some point the National Bureau of Economic Research (the agency that certifies when the US economy is in recession) will have to admit,

The US economy has been the main engine of the world economy since the post-war period, says Andrei Redulescu. “Never in history has the spread between 10-year and 3-month interest rates been as low as it was in January. This is a clear signal that the world’s largest economy is in recession. This scenario is easy to confirm if you look at the dynamics of productive investment in America: there were 3 consecutive quarters of decline – the second, third and fourth quarters of 2022,” the economist explains.

This is the problem of the distribution of resources in the world’s first economy, in the context in which the American political class found itself, in a period of vulnerability, which has never happened before in the post-war period, Redulescu also notes.

Last year, U.S. labor productivity fell the most sharply since 1974, when the world economy faced its first oil shock.

These issues will need to be resolved by “Corporate America”. If you look at Blomberg, every day there are layoff announcements at major companies in the United States, whether we’re talking about the technology sector or the financial and banking sector.

The Eurozone economy seems to have avoided recession

The Eurozone economy seems to have avoided recession because earlier this year we had the opportunity to see a significant drop in everything that means commodity quotes, as the Eurozone is very dependent on imports of raw materials, mainly hydrocarbons. .

International trade has undergone the most serious correction since the first wave of the coronavirus pandemic

In November, it decreased for the first time since 2020, and we had practically the most severe adjustment in international trade since the first wave of the coronavirus pandemic. So, it is clear that we are seeing a reorientation in what global economic flows mean, and obviously, as international trade continues to show unfavorable developments, this downward trend will also be reflected in the industrial sector. why Because they are closely related: international trade and world industrial production.

Even the data published by the INS for Romania show that we had a decrease in industrial production in annual dynamics in December by 10.3%, which was the most serious adjustment in recent quarters, and it is clear that this evolution was also strongly influenced by the reorientation of world economic flows.

It is very likely that Romania’s GDP will exceed the 300 billion euro threshold this year, which is again a record.

Last year was a year of records in the national economy, a record of indirect investments, a record of capital from European funds, a record of results in the financial sector.

Foreign investors continued to bet on the national economy, with FDI exceeding €10 billion last year, and it is clear that this will have a positive impact on the real and financial aspects of the economy in the coming quarters

If you look at budget execution, last year in the last quarter there was a record level of public capital expenditures – more than 40 billion in capital expenditures, which indicates good prospects for the development of the economy and the continuation of the investment cycle. after the pandemic

The speed of absorption of European funds still puts us below the level of the countries of the region, but Romania greatly accelerated this process of attracting European funds last year.

Romania has been the star of European economies in terms of the process of economic convergence during the last decades. In 2021, we were 74% above the European Union average in terms of GDP per capita at purchasing power parity, and it is very likely that we will surpass Poland in the next 3 years.

It is very likely that Romania’s GDP will exceed the 300 billion euro threshold this year, which is again a record.

More and more voices say that the risk of a third world war is increasing

Structural reforms must be accelerated to correct the twin deficits, the current account and the budget.

The current forecast for the growth of Romania’s economy is 2.6% this year, according to Andrei Redulescu

“For 2023, the current forecast, in my opinion, can easily be revised upwards, unless we witness the outbreak of a large-scale global conflict, as more and more voices say that the risk of a third world war is increasing. The current forecast predicts the growth of the Romanian economy in 2023 by 2.6% in volume. Attention, this scenario is based on the prospect of a continuation of the post-pandemic investment cycle with an increase in productive investment of more than 6% with a driving effect on the economy,” Andrej Redulescu said on Tuesday at “FY2023”. a conference organized by Finmedia and the financial market.

Regarding inflation, Andrej Radulescu noted that the harmonized index of consumer prices averaged 12% in 2022, compared to 4.1% in 2021, and should fall to 8.5% this year and 4.3% in 2024. He believes that in this context the NBR has the opportunity to change the monetary policy, and it is possible that we will witness a decrease in the interest rate of the monetary policy in the second half of this year.