ANALYSIS: Construction market remains among the most risky economy sectors

The construction market will remain one of the riskiest sectors in 2014, according to estimates made by Yves Zlotowski, Chief Economist of Coface company specialized in risk management, while the companies in the field will face new insolvency cases. The sector made a negative contribution to GDP growth in 2013 (-0.1%), in the context in which it participated with 7.9 % to the formation of GDP. However, despite the fact that the forecasts of the construction field are not exactly positive, Coface has improved the estimate on Romania's economic growth to 2.3%, a more optimistic forecast than the one of maximum 2.2% made by authorities and international financial institutions. "Currently, the level of bad loans in Romania is worrying. Despite a healthy recovery of the Romanian economy, there is frailty in the corporate field", said Yves Zlotowski. Furthermore, Coface has maintained, in March 2014, the Romania's rating to "B", one of the lowest in Central and Eastern Europe, while the business climate in our country has been ranked with A4. In the opinion of Valentin Lazea, the Chief Economist at the Central Bank, which was expressed personally and not as a representative of the Central Bank, Romania would need 9-10 years in which to increase by 2% more than the average evolution of EU in order to reach the level of developed countries and to join the Eurozone. "At the end of last year, the GDP per capita in Romania was 50% in comparison with the EU average, while the least developed countries that were received in the Eurozone, Estonia and Latvia, had a GDP per capita of 66%, respectively 60% of the European average. Therefore, I believe that it is unlikely that the Eurozone will open its gates to a state with a GDP per capita well below the European average, because this would create problems for both the country itself and the area. In order to reach 60% of the EU average for the GDP per capita adjusted, Romania should grow for nine or ten years with 2% more than the European average. This means that when the EU will resume its average growth rate of 1.5% per year, Romania will have to grow sustainably with at least 3.5% per year", said Valentin Lazea.