Romanian Ctrl Bker: Fiscal Consolidation Needed To Resume Lending

Fiscal consolidation is important to allow a restart of the lending activity this year, once financing demand starts to pickup, especially from the corporate sector, Romania's central bank deputy governor Cristian Popa said Wednesday.

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Romania has to continue narrowing its budget deficit in 2011 and 2012 to meet its objective of entering the euro-area in 2015, Popa said at an economic seminar in Vienna.

The Eastern European country has pledged to bring down its government deficit to 5.9% of the gross domestic product in 2010, from about 7.3% of the GDP last year.

Popa said Romania will post a positive economic growth in 2010.

The central banker did not comment on the central bank's monetary policy rate movements, but said the interest rates in the banking system might drop by more than one percentage point this year.

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