Pessimists, you lost once more!

So, we heard all the pessimists since the beginning of the year. They predicted disaster, collapse and I don’t know what else regarding the future of Romanian economy. They told us irrelevant things connecting the problems of American banks with the Romanian ones, as if Romanian banks have given loans to anyone following the tactics of the Americans. Usually when someone does not try to deeply understand a market, he prefers to search for another one which he knows and he searches for common things, so as to attempt an approach like this.

Now we have the official information for the results of Romanian economy in the first quarter of the year. The Gross Domestic Product (GDP – PIB in Romanian) has advanced this quarter with the really impressive 8.2%! Even the Romanian Economy and Finance Minister had predicted 7.5%! Since 1990, this is one of the top performances of the economy, but let us be serious, the 9% of 2004 was much easier than this one today. Even the 8,3% of the third quarter of 2006 was based in the excellent results in the agricultural segment, which was a coincidence of the excellent weather then.

For me this figure is the most impressive of the recent Romanian economic history. First of all, we know that the higher is the number of the GDP, the more difficult it is to raise fast. Also, some people estimate that this growth is a result of the good tax collection, the generated electrical power and the strong investments which continue entering the country. Do you find any of these factors as unhealthy? Isn’t it what each country should do? The tax collection shows the healthy progress of the whole economy and when the state has money in the bank, the financing of the budget, the public investments, everything is easier and very healthy. The generated electrical power is a result of the country’s investment in energy (or not?). The Foreign Direct Investments and the investments in total are the strongest vote of trust in this market and they will have as result even lower unemployment (and even bigger headaches for us, who want to hire personnel).

So, when the Romanian economy is growing so healthy, I think it is more than normal to expect that the demand for Real Estate properties will remain strong too. Especially the residential sector will have very good years to come, as a result of the strong demand that is generated by a healthy expanded economy.

We expect the official analysis for the structure of this growth and we will return to this subject. I, personally, as a non expert (and without any degree in economics, just with 21 years that I am involved in business and I read a lot about it) estimate that the growth of the Romanian GDP this year may even exceed 7%, if the agricultural segment will help and will have the results of 2006. With weak agriculture, the GDP will be for sure over 6,5%.

I remind you that Romania is the only country of European Union that the E.U. Committee has announced that it will have an expected growth of GDP around an average 6% for the next 5 years…

Do you still have worries?