In 2013, the Romanian capital market has experienced probably its best year in the last five years, with some initial public offerings (IPOs) at record values, believes Greg Konieczny, Executive Vice President of Franklin Templeton Emerging Markets Group and Fund Manager of Romania’s Fondul Proprietatea. “We expect this trend could continue in 2014 and, […] are optimistic there could be further acceleration of growth as well as crucial capital market developments this year,” he added.
He reminded of the GDP growth expectation of 2.5 percent for 2013, and of the potential for a positive evolution of the local Romanian economy, which could benefit from a recovery of global growth that seems to be gaining momentum, along with an uptick in global trade.
“We agree with the World Bank’s expectations for Eurozone growth to potentially accelerate to an annual average of 1.1 percent in 2014. Within the Eurozone, it seems most probable to us that Germany will be the engine of growth for the region in 2014, which means any positive spill-over effect could be felt in the periphery and in Central and Eastern Europe, including Romania,” the Franklin Templeton representative added.
Konieczny ties Romania’s potential growth for 2014 to exports. “We see opportunities in services, the energy and the automotive sectors.”
“Moreover, we believe one of the strongest contributors to growth could likely be consumption. Domestic demand in Romania has been picking up very slowly in the past couple of years but, with record low inflation, decreasing interest rates, low and stable unemployment levels and a low base compared to 2007-2008, we expect it could improve in 2014,” Konieczny concluded.
Franklin Templeton is the fund manager for Romania’s investment fund Fondul Proprietatea, which was created in 2005 as a joint stock company with a special purpose to provide compensation to the people whose real estate assets had been confiscated by the Romanian state during the communist regime and who can no longer receive restitution in kind.