Seb Country Analysis 2009 Romania

Romania SEB MERCHANT BANKING – COUNTRY RISK ANALYSIS

February 18, 2009

Analyst: Rolf Danielsen. Tel : +46 8 763 83 92. E-mail : [email protected]

Years of overheating driven by rapid credit growth and procyclical fiscal policies reached the tipping point last fall and Romania risks a near term hard landing.

Country Risk Analysis

RON (billions)

= ^ÑíÉê=óÉ~êë=çÑ=ëíÉää~ê=éÉêÑçêã~åÅÉ=íÜÉ=ÉÅçåçãó=ëäçïë=~ÄêìéíäóK==få=OMMUI=ÖêçïíÜ= ~ÅÅÉäÉê~íÉÇ=íç=UIQB=~ë=~ÖêáÅìäíìêÉ=êÉÅçîÉêÉÇ=Ñêçã=ÇêçìÖÜí=íÜÉ=éêÉÅÉÇáåÖ=óÉ~êI=~åÇ= íÜÉ=ÇçãÉëíáÅ=ÇÉã~åÇ=Äççã=ÅçåíáåìÉÇ=áåíç=íÜÉ=åÉï=óÉ~ê=ÄìçóÉÇ=Äó=ëíêçåÖ=Éñéçêíë= ~åÇ=ÄìääáëÜ=ëÉåíáãÉåí=~ãçåÖ=áåîÉëíçêë=~åÇ=ÅçåëìãÉêëK=oÉ~ä=Éëí~íÉ=ÅçåëíêìÅíáçå= ëíÉ~ãÉÇ=Ñçêï~êÇ=éçïÉêÉÇ=Äó=ÖÉåÉêçìë=ÅêÉÇáíë=Ñêçã=Ä~åâë=é~êíáÅìä~êäó=áå=ÑçêÉáÖå= ÅìêêÉåÅáÉë=áåÅäìÇáåÖ=íç=ÜçìëÉÜçäÇëK==^ë=~=êÉëìäí=íÜÉ=ÉÅçåçãó=ïÉåí=áåíç=çîÉê=ÖÉ~êI= ÅêÉ~íáåÖ=éêÉëëìêÉë=áå=éêçÇìÅí=~åÇ=ä~Äçê=ã~êâÉíëK==qÜÉ=ä~ííÉê=Ü~Ç=~äêÉ~Çó=íáÖÜíÉåÉÇ= ÅçåëáÇÉê~Ääó=ÇìÉ=íç=ÉãáÖê~íáçå=çÑ=àçÄJëÉÉâÉêë=íç=fí~äó=~åÇ=pé~áåK=`çãÄáåÉÇ=ïáíÜ= äçåÖJëí~åÇáåÖ=ëíêìÅíìê~ä= Bank loans to households áåÑäÉñáÄáäáíáÉë=ä~Äçê=ëÜçêí~ÖÉ= (long and medium term) ÄÉÅ~ãÉ=~ÅìíÉ=~åÇ=ëÉåí=ï~ÖÉ= 60 ÇÉã~åÇë=ëç~êáåÖK===oáëáåÖ= 50 ÇçãÉëíáÅ=éêáÅÉ=éêÉëëìêÉë= ÑçääçïÉÇ=~åÇ=ÅçãÄáåÉÇ=ïáíÜ= euro etc 40 ÜáÖÜ=áåíÉêå~íáçå~ä=ÑìÉä=~åÇ=ÑççÇ= 30 éêáÅÉë=íç=ÇêáîÉ=áåÑä~íáçå=áåíç= ÇçìÄäÉ=ÇáÖáí=íÉêêáíçêó=Ñçê=ëÉîÉê~ä= 20 ãçåíÜëK==Ó=qÜáë=Å~ãÉ=íç=~= Leu 10 ëìÇÇÉå=Ü~äí=áå=íÜÉ=Ñ~ää=~ë=êáëâ= ~ééÉíáíÉ=çÑ=áåíÉêå~íáçå~ä= 0 2005 2006 2007 2008 áåîÉëíçêë=éäìããÉíÉÇ=~åÇ= áåíÉêå~íáçå~ä=äáèìáÇáíó=~ää=Äìí= ÇêáÉÇ=ìéK=f=å=oçã~åá~I=Ä~åâë= ~äãçëí=ÑêçòÉ=åÉï=ÅêÉÇáíë=áå=íÜÉ=ä~ëí=ÑÉï=ãçåíÜë=çÑ=íÜÉ=óÉ~êI=ê~éáÇäó=ÅççäáåÖ=~Åíáîáíó= áå=íÜÉ=ÜçìëáåÖ=ã~êâÉí=~åÇ=ëÜ~êéäó=êÉÇìÅáåÖ=áãéçêí=ÖêçïíÜK==qÜ~í=éêÉîÉåíÉÇ=íÜÉ= íê~ÇÉ=ÇÉÑáÅáí=ÖêçïáåÖ=çìí=çÑ=ÅçåíêçäI=äÉ~îáåÖ=áí=~í=íÜÉ=ë~ãÉ=äÉîÉä=êÉä~íáîÉ=íç=dam=~ë=áå= OMMTI=ïÜáÅÜI=ÜçïÉîÉêI=ëíáää=ãÉ~åí=~=ÜÉÑíó=NQBLdamK==tÜáäÉ=ÇÉÑáÅáíë=áå=éêÉîáçìë=óÉ~êë= ìëÉÇ=íç=ÄÉ=~äãçëí=Ñìääó=ÅçîÉêÉÇ=Äó=ÑçêÉáÖå=ÇáêÉÅí=áåîÉëíãÉåíë=EcafFI=íÜ~í=ëÜ~êÉ=ï~ë= Ççïå=íç=çåäó=Ü~äÑ=áå=OMMUK== = qÜÉ=ÑáëÅ~ä=ÇÉÑáÅáí=ÄÉÅçãÉë=~=ÅçåÅÉêåK==cçê=ëÉîÉê~ä=óÉ~êë=oçã~åá~=éêáÇÉÇ=áíëÉäÑ=çÑ= éêìÇÉåí=ã~Åêç=ÉÅçåçãáÅ=éçäáÅáÉë=íÜ~í=Ü~Ç=É~êåÉÇ=íÜÉ=Åçìåíêó=~å=áåîÉëíãÉåí=Öê~ÇÉ= ê~íáåÖ=ïáíÜ=áåíÉêå~íáçå~ä=ê~íáåÖ=~ÖÉåÅáÉëK=qÜÉ=ÑáëÅ~ä=ÇÉÑáÅáí=Ü~Ç=ÄÉÉå=Åçåí~áåÉÇ=ïÉää= ïáíÜáå=j~~ëíêáÅÜí=ÅêáíÉêá~I=~äíÜçìÖÜ=ëíêçåÖ=ÖêçïíÜ=Ü~Ç=Ñ~Åáäáí~íÉÇ=íÜ~í=êÉëìäíK==_ìí= Foreign exchange, long term, households [ + Foreign exchange, medium term, households] Lei, long term, households [ + Foreign exchange, medium term, households]

Source: Reuters EcoWin

important your attention is drawn to the statement on the back cover of this report which affects your rights.

SEB Merchant Banking Country Risk Analysis June 21, 2008

OMMU=ÄÉáåÖ=~å=ÉäÉÅíáçå=óÉ~êI=éçäáíáÅá~åë=ïÉåí=çìí=çÑ=íÜÉáê=ï~ó=áå=éêçãáëáåÖ=ÖÉåÉêçìë= ï~ÖÉ=ÜáâÉë=Ñçê=éìÄäáÅ=ëÉÅíçê=ÉãéäçóÉÉë=~åÇ=~=ÖÉåÉêçìë=Äççëí=íç=éÉåëáçåëK==qÜáë=åçí= çåäó=ÑìÉääÉÇ=ï~ÖÉ=áåÑä~íáçå=áå=íÜÉ=ÉÅçåçãó=~í=ä~êÖÉI=Äìí=ÅçãÄáåÉÇ=ïáíÜ=çíÜÉê= çîÉêëéÉåÇáåÖ=~åÇ=í~ñ=êÉÇìÅíáçåë=áåÅäìÇáåÖ=çÑ=s^q=çå=ÑççÇ=áíÉãë=íç=ëÉåÇ=íÜÉ=ÑáëÅ~ä= ÇÉÑáÅáí=çåíç=~=êáëáåÖ=íê~àÉÅíçêóK==^í=íÜÉ=íáãÉ=çÑ=íÜÉ=ÖÉåÉê~ä=ÉäÉÅíáçåë=áå=kçîÉãÄÉêI=íÜÉ= ÇÉÑáÅáí=ï~ë=~ÅÅÉäÉê~íáåÖ=ê~éáÇäó=êÉÑäÉÅíáåÖ=íÜÉ=ìåÉñéÉÅíÉÇ=Ñêçåíäç~ÇáåÖ=çÑ=éÉåëáçå= áåÅêÉ~ëÉë=Äó=íÜÉ=çìíÖçáåÖ=ÖçîÉêåãÉåíK====få=íÜÉ=ÉîÉåíI=íÜÉ=ÄìÇÖÉí=ÉåÇÉÇ=áå=~=ÇÉÑáÅáí= çÑ=ãçêÉ=íÜ~å=RB=çÑ=damI=ãçêÉ=íÜ~å=íïáÅÉ=~ë=ãìÅÜ=~ë=íÜÉ=éêÉîáçìë=óÉ~ê=~åÇ=ãçêÉ= íÜ~å=íïáÅÉ=~ë=ãìÅÜ=~ë=éä~ååÉÇ=~í=íÜÉ=ÄÉÖáååáåÖ=çÑ=íÜÉ=ÅìêêÉåí=óÉ~êK=== = táää=íÜÉ=åÉï=ÖçîÉêåãÉåí=íìêå=íÜÉ=íáÇÉ\==qç=ëíÉã=íÜÉ=çåÖçáåÖ=ÇÉíÉêáçê~íáçå=íç=íÜÉ= ÑáëÅ~ä=éçëáíáçåI=íÜÉ=çìíÖçáåÖ=~Çãáåáëíê~íáçå=Ü~Ç=éìí=íÜÉ=áãéäÉãÉåí~íáçå=çÑ=íÜÉ= éêÉîáçìë=é~êäá~ãÉåí=ÇÉÅáëáçå=íç=ÜáâÉ=íÉ~ÅÜÉêëÛ=ë~ä~êáÉë=Äó=RMB=~ë=çÑ=g~åì~êó=OMMV=çå= ÜçäÇ=ÄÉÑçêÉ=áí=äÉÑí=çÑÑáÅÉK==eçïÉîÉêI=ÇÉëéáíÉ=íÜ~í=ÉåÅçìê~ÖáåÖ=ëáÖå=çÑ=êÉåÉïÉÇ=ÑáëÅ~ä= éêìÇÉåÅÉI=ã~åó=çÄëÉêîÉêë=ÇçìÄí=íÜÉ=áåÅçãáåÖ=ÖçîÉêåãÉåí=ïáää=Ü~îÉ=åÉáíÜÉê=íÜÉ= ~Äáäáíó=åçê=íÜÉ=éÉêëÉîÉê~åÅÉ=íç=Å~êêó=íÜêçìÖÜ=~åó=ëáÖåáÑáÅ~åí=ÑáëÅ~ä=êÉëíê~áåí=áå=OMMVI= ~åÇ=íÜ~í=íÜÉ=ÄìÇÖÉí=áå=íÜÉ=ÄÉëí=çÑ=Å~ëÉë=ïáää=ÉåÇ=áå=~=åÉï=ÇÉÑáÅáí=áå=äáåÉ=ïáíÜ=íÜÉ= êÉëìäí=çÑ=OMMUK==oÉÅÉåí=Ç~í~=áåÇáÅ~íÉ=éäìåÖáåÖ=í~ñ=êÉîÉåìÉë=ïÜáäÉ=ãçëí=ëéÉåÇáåÖ= ÅçããáíãÉåíë=ÅçåíáåìÉK=få=~ÇÇáíáçåI=íÜÉ=åÉï=éçäáíáÅ~ä=ëáíì~íáçå=áë=ÅçãéäáÅ~íÉÇ=~åÇ= Ü~ë=åçí=Ä~ëáÅ~ääó=ÅÜ~åÖÉÇ=íÜÉ=éçäáíáÅ~ä=ëí~äÉã~íÉ=Å~ìëÉÇ=Äó=~=Ñê~ÖãÉåíÉÇ=éçäáíáÅ~ä= ä~åÇëÅ~éÉK==qÜÉ=kçîÉãÄÉê=OMMU=ÉäÉÅíáçå=êÉëìäíÉÇ=áå=~=îáêíì~ä=Çê~ï=ÄÉíïÉÉå=íÜÉ= ~ääá~åÅÉ=çÑ=íÜÉ=ëçÅá~ä=ÇÉãçÅê~íë=EpmaF=ïáíÜ=íÜÉ=ÅçåëÉêî~íáîÉë=E`mF=~åÇ=íÜÉ= ÇÉãçÅê~íáÅ=äáÄÉê~äë=EaimF=ÄçíÜ=çÑ=ïÜáÅÜ=ïçå=PPB=çÑ=íÜÉ=îçíÉëK=qÜÉ=íïç=ïáååÉêë= ÑçêãÉÇ=~=Åç~äáíáçå=ÖçîÉêåãÉåí=ïáíÜ=~=ÅçãÑçêí~ÄäÉ=ã~àçêáíó=áå=é~êäá~ãÉåíK=tÜáäÉ=íÜ~í= ã~ó=ëçìåÇ=éêçãáëáåÖI=íÜÉ= ìåÇÉêäóáåÖ=íÉåëáçåë=~ãçåÖ=íÜÉëÉ= ìåäáâÉäó=ÄÉÇJã~íÉë=~êÉ=é~äé~ÄäÉI=~ë= Romania has made significant ëÉÉå=áå=íÜÉ=ÉñÅÜ~åÖÉ=çÑ=ëÉêáçìë= strides in catching up with EU Åçêêìéíáçå=ÅÜ~êÖÉëK==mêÉëëìêÉë=~êÉ= income levels, but fast real ãçìåíáåÖ=Ñçê=íÜÉ=áãéäÉãÉåí~íáçå=çÑ= convergence has gone hand in íÜÉ=éçëíéçåÉÇ=ï~ÖÉ=ÜáâÉë=Ñçê= hand with growing macro economic imbalances. Once EU íÉ~ÅÜÉêëI=ïÜáÅÜ=áå=íìêå=ïáää=íêáÖÖÉê= accession prospects looked ÇÉã~åÇë=Ñçê=ëáãáä~ê=ê~áëÉë=Ñçê=çíÜÉê= secure, foreign capital flooded Öêçìéë=çÑ=éìÄäáÅ=ÉãéäçóÉÉëK== into Romania to take advantage = of perceived improvements in táää=ãçåÉí~êó=ÅçãÉ=íç=íÜÉ=êÉëÅìÉ\= investments risk and returns, få=OMMRI=íÜÉ=ÅÉåíê~ä=Ä~åâ=~ÇçéíÉÇ=~å= triggering an absorption boom. áåÑä~íáçå=í~êÖÉíáåÖ=ãçåÉí~êó=éçäáÅóK== (IMF 2008) aÉëéáíÉ=íÜÉ=éÉ~âáåÖ=çÑ=áåÑä~íáçå=áå= OMMU=~í=UIQB=~ë=~îÉê~ÖÉ=Ñçê=íÜÉ=óÉ~êI= íÜÉ=ÖÉåÉê~ä=àìÇÖãÉåí=áë=íÜ~í=íÜÉ=ÅÉåíê~ä=Ä~åâ=Ü~ë=éìêëìÉÇ=íÜáë=éçäáÅó=ïáíÜ=ëçãÉ= ëìÅÅÉëë=ÖáîÉå=íÜÉ=ÇáÑÑáÅìäí=ÉåîáêçåãÉåí=çÑ=~=éêçJÅóÅäáÅ~ä=ÑáëÅ~ä=ëí~åÅÉK==tÜÉå=íÜÉ= ~ééêÉÅá~íáçå=íáÇÉ=íìêåÉÇ=áå=ãáÇJOMMUI=íÜÉ=ÅÉåíê~ä=Ä~åâ=ÄÉÖ~å=íç=ÜáâÉ=ê~íÉë=íç=ëçÑíÉå= íÜÉ=Ñ~ää=çÑ=íÜÉ=ÉñÅÜ~åÖÉ=ê~íÉK==eçïÉîÉêI=~ë=íÜ~í=éêçîÉÇ=áåëìÑÑáÅáÉåí=áå=nQI=áí=~äëç= áåíÉêîÉåÉÇ=Ñçê=ëçãÉ=AQ=ÄáääK=áå=íÜÉ=ÑçêÉñ=ã~êâÉíI=ÇÉéäÉíáåÖ=êÉëÉêîÉë=Äó=~=íÉåíÜ=íç=APQ= ÄáääKK==qÜÉó=~êÉ=ëíáää=èìáíÉ=~ÇÉèì~íÉ=áå=íÉêãë=çÑ=R=ãçåíÜë=áãéçêí=ÅçîÉê~ÖÉI=Äìí= Çï~êÑÉÇ=Äó=ANT=ÄáääK=~ãçêíáò~íáçå=~åÇ=ëçãÉ=APM=ÄáääK=ëÜçêíJíÉêã=äç~åë=Ñ~ääáåÖ=ÇìÉ= çîÉê=íÜÉ=åÉñí=NO=ãçåíÜëK== = oáëáåÖ=êáëâ=çÑ=ëíê~áåÉÇ=äáèìáÇáíóK==qÜ~í=ïçìäÇ=åçí=ÄÉ=çÑ=ãìÅÜ=ÅçåÅÉêå=ìåÇÉê=åçêã~ä= ÅáêÅìãëí~åÅÉëI=Äìí=íÜÉ=êáëâ=éçáåíÉÇ=çìí=Äó=áåÅêÉ~ëáåÖ=åìãÄÉêë=çÑ=çÄëÉêîÉêë=áë=çÑ= ÑìêíÜÉê=ÖäçÄ~ä=ÅêÉÇáí=ÅêìåÅÜ=~åÇ=äáèìáÇáíó=ëèìÉÉòÉK==qÜ~í=êáëâ=áë=~ÅÅÉåíì~íÉÇ=Äó=íÜÉ= Ç~åÖÉê=íÜ~í=ëçãÉ=ÑçêÉáÖå=é~êÉåí=Ä~åâë=ëóëíÉã=ÅçìäÇ=ïáíÜÇê~ïI=~ÑíÉê=Ü~îáåÖ= 2

SEB Merchant Banking Country Risk Analysis June 21, 2008

Ñáå~åÅÉÇ=ãçêÉ=íÜ~å=~=íÜáêÇ=çÑ=íÜÉ=êÉÅÉåí=ÅêÉÇáí=ÄççãK==kçíáåÖ=íÜ~í=ÑçêÉáÖå=Ä~åâë= Åçåíêçä=VMB=çÑ=íÜÉ=ÇçãÉëíáÅ=Ä~åâáåÖ=ëóëíÉãI=íÜÉ=êÉëìäí=ÅçìäÇ=ÄÉ=~=ÖÉåÉê~ä=ÇÉÑ~ìäí= ëáíì~íáçå=ÄÉÑçêÉ=äçåÖ=ÉîÉå=íÜçìÖÜ=oçã~åá~=áë=ãçêÉ=ëçäîÉåí=íÜ~å=ã~åó=éÉÉêëK= bñíÉêå~ä=ÇÉÄí=ëí~åÇë=~í=~Äçìí=RMB=çÑ=damI=äÉëë=íÜ~å=Ü~äÑ=íÜÉ=äÉîÉä=çÑ=íÜÉ=_~äíáÅ= ÅçìåíêáÉëK==lìí=çÑ=íÜ~í=ÇÉÄí=íÜÉ=ÖçîÉêåãÉåí=Åçìåíë=Ñçê=çåäó=~=ãáåçê=é~êíI=äáâÉ=áå=íÜÉ= _~äíáÅëK==tÜáäÉ=íÜáë=ëÜçìäÇ=ãáíáÖ~íÉ=íÜÉ=êáëâ=çÑ=~å=çìíêáÖÜí=ëçîÉêÉáÖå=ÇÉÑ~ìäí=áå=íÜÉ= åÉ~ê=íÉêãI==Åçãé~åáÉë=~åÇ=ÜçìëÉÜçäÇëI=~êÉ=ëççå=äáâÉäó=íç=ÄÉÅçãÉ=Ñáå~åÅá~ääó= îìäåÉê~ÄäÉK=qÜ~í=áë=åçí=çåäó=ÄÉÅ~ìëÉ=çÑ=ïÉ~â=áåÅçãÉ=éêçëéÉÅíë=~ë=ÉÅçåçãáÅ=~Åíáîáíó= ÇÉÅÉäÉê~íÉë=ëÜ~êéäó=íç=äÉëë=íÜ~å=NB=ÖêçïíÜ=áå=OMMV=~åÇ=éÉêÜ~éë=OMNMI=Äìí=~äëç= ÄÉÅ~ìëÉ=çÑ=íÜÉ=ëíÉÉé=ÇÉéêÉÅá~íáçå=çÑ=íÜÉ=ÉñÅÜ~åÖÉ=ê~íÉI=ÜìêíáåÖ=Åçãé~åáÉë=~åÇ= ÜçìëÉÜçäÇë=ïáíÜ=ÇÉÄí=áå=Éìêçë=~åÇ=pïáëë=cê~åÅI=êÉéêÉëÉåíáåÖ=RSB=çÑ=~ää=Ä~åâ=äç~åë=íç= íÜÉ=éêáî~íÉ=ëÉÅíçêK=== = JJGJJ= = fåîÉëíçê=îáÉï=çå=oçã~åá~=Ü~ë=ÅÜ~åÖÉÇ=ëÜ~êéäó=íç=ÄÉ~êáëÜ=ãççÇ=áå=êÉÅÉåí=íáãÉë= Ñêçã=ÉÄìääáÉåí=çéíáãáëã=çåäó=~=óÉ~ê=~ÖçK==qÜÉ=ê~íáåÖ=~ÖÉåÅáÉë=Ü~îÉ=ÇçïåÖê~ÇÉÇ=íÜÉ= Åçìåíêó=Äó=ëÉîÉê~ä=åçíÅÜÉë=Ñêçã=ÇÉÅÉåí=áåîÉëíãÉåí=Öê~ÇÉë=áåíç=ëéÉÅìä~íáîÉ=Öê~ÇÉëK== táíÜ=íÜÉ=çåÖçáåÖ=ÇáÑÑáÅìäí=áåíÉêå~íáçå~ä=äáèìáÇáíó=~åÇ=ÅêÉÇáí=ëáíì~íáçå=oçã~åá~= ÅçìäÇ=ëççå=ÄÉ=Üáí=Äó=ëÉîÉêÉ=Å~éáí~ä=ÑäáÖÜí=~åÇ=áå~Äáäáíó=íç=êçää=çîÉê=ÑçêÉáÖå=Ñáå~åÅáåÖ= ~í=êÉ~ëçå~ÄäÉ=ê~íÉëK==tÜáäÉ=êÉëÉêîÉë=ëÜçìäÇ=ëìÑÑáÅÉ=íç=ÅçîÉê=êÉä~íáîÉäó=ãçÇÉëí= ÖçîÉêåãÉåí=ÑçêÉáÖå=ÇÉÄí=ëÉêîáÅÉ=~åÇ=~=ê~éáÇäó=ëÜêáåâáåÖ=íê~ÇÉ=ÇÉÑáÅáí=áå=OMMVI=íÜÉ= çåìë=ïáää=ÄÉ=çå=íÜÉ=éêáî~íÉ=ëÉÅíçê=íç=ãÉÉí=áíë=çÄäáÖ~íáçåë=áå=~å=ÉåîáêçåãÉåí=çÑ= ëÜ~êéäó=Ñ~ääáåÖ=ÉÅçåçãáÅ=~Åíáîáíó=~åÇ=~=éêçÄ~Ääó=ïÉ~âÉåáåÖ=ÉñÅÜ~åÖÉ=ê~íÉK=tÉ= ÄÉäáÉîÉ=íÜ~í=áåÅêÉ~ëÉë=íÜÉ=ÖÉåÉê~ä=Åçìåíêó=êáëâ=ãçêÉ=ëíÉÉéäó=íÜ~å=íÜÉ=ëçîÉêÉáÖå=êáëâK== =

Key ratios

2009

mçéìä~íáçå=EãáääáçåëF

Resilience 12

ON

10 8

GDP/capita ($)

7201

GDP (change)

6

Macro balance

0,6%

4

Liquidity

2 0

Inflation

4,1%

Curr.acc. balance/GDP

-12%

Reserves/imports (months) Budget balance/GDP(*)

Information

-5,2%

Government debt/GDP(*) bñíÉêå~ä=ê~íáåÖëW= cáíÅÜW=__HLkbd pCmW=__HLkbd

Absence of event risk

4,4

mÉÉêëW râê~áåÉ i~íîá~ oìëëá~=

Romania

14%

Ukraine

Graph: The graph shows Romania as relatively strong on resilience -- i.e. good long term factors, compared with many peers, while weakness is on the macro balance. Event risk is high but milder than in Ukraine.

=

i~íÉëíW=oçã~åá~=~ëâë=Ñçê=fjc=ëìééçêí= ==få=ä~íÉ=cÉÄêì~êó=íÜÉ=ÖçîÉêåãÉåí=çéÉåÉÇ=ÇáëÅìëëáçåë=ïáíÜ=íÜÉ=fjc=Ñçê=~=éçëëáÄäÉ=fjc= éêçÖê~ã=~åÇ=ÅêÉÇáí=Ñ~Åáäáíó=ïáíÜ=íÜÉ=~áã=íç=ÜÉäé=íÜÉ=Åçìåíêó=ãÉÉí=~å=çåÉêçìë=åÉ~ê=íÉêã= ÇÉÄí=ëÉêîáÅÉK==pìÅÜ=~=éêçÖê~ã=áë=äáâÉäó=íç=éìí=~=íáÖÜí=äáÇ=çå=ÑáëÅ~ä=ÉñéÉåÇáíìêÉë=~åÇ=äáãáí=~åó= ë~ä~êó=áåÅêÉ~ëÉë=áå=OMMVK==qÜ~í=ëÜçìäÇ=ÜÉäé=ÄçäëíÉê=áåîÉëíçê=ëÉåíáãÉåíI=É~ëáåÖ=íÜÉ=êÉÑáå~åÅáåÖ= çÑ=oçã~åá~Ûë=ÑçêÉáÖå=ÇÉÄí=~åÇ=íÜÉ=Ñáå~åÅáåÖ=çÑ=íÜÉ=ÅçåíáåìÉÇ=ÉñíÉêå~ä=ÅìêêÉåí=~ÅÅçìåí= ÇÉÑáÅáíK=qÜáë=áë=~=éçëáíáîÉ=ÇÉîÉäçéãÉåíI=Äìí=ÇçÉë=åçí=ÅÜ~åÖÉ=çìê=çîÉê~ää=êáëâ=~ëëÉëëãÉåí= ÄÉÑçêÉ=ïÉ=ëÉÉ=íÜÉ=Åçìåíêó=~ÄäÉ=íç=Å~êêó=~å=fjcJäÉÇ=~ìëíÉêáíó=éêçÖê~ã=íç=áíë=ëìÅÅÉëëÑìä= ÅçåÅäìëáçåK==

3

SEB Merchant Banking Country Risk Analysis June 21, 2008

Key data: 2004 2005 GDP (mill. US$) 75954 98397 GDP/capita (US$) 3496 4550 GDP (change) 8,4% 4,2% Investments/GDP 21% 23% Budget balance/GDP* -1,5% -0,8% 19% 16% Govt debt/GDP** CPI inflation (%) 11,9% 9,0% 34,8% 40,2% Money demand (%) 2094 3514 Stock prices Interest rates 20,3% 9,6% Exch. Rate ($) 3,26 2,91 Trade/GDP (%) 71% 66% Oil price (Brent) $38 $54 Millions US $ 23 551 27 647 Export of goods 30 213 37 252 Imports of goods 288 1 107 Other: -6 374 -8 498 Current account -8,4% -8,6% (% of GDP) 6 362 6 464 FDI -8 991 -11 839 Loan repayments 12 955 20 915 Net other capital flows 3 952 7 042 Balance of payments NN=MPV NU=MUN Reserves 26 972 35 516 Total debt 3 680 6 413 o/w short term debt Sources: Oxford Economics and SEB estimates.

2006 123679 5744 7,9% 26% -1,5% 13% 6,6% 26,7% 4676 8,4% 2,81 65% $65

2007 167423 7810 6,0% 31% -2,3% 13% 4,8% 28,6% 6296 7,5% 2,44 63% $73

2008 193400 9061 8,0% 35% -5,1% 13% 7,8% 30,5% 4041 9,5% 2,52 69% $98

2009 153016 7201 0,6% 35% -5,2% 14% 4,1% 8,5%

2010 179852 8505 0,8% 38% -4,8% 13% 3,0% 10,5%

2011 207617 9867 2,3% 41% -4,2% 15% 3,6% 10,5%

8,0% 3,37 86% $45

5,6% 3,22 79% $60

5,3% 3,22 76% $74

32 485 47 368

40 315 64 542

51 999 81 073

55 332 76 363

61 757 81 211

68 860 89 949

2 027 -12 856

922 -23 305

1 724 -27 350

1 981 -19 050

1 666 -17 788

2 050 -19 038

-10,4% 11 009 -16 367

-13,9% 9 664 -22 125

-14,1% 13 939 -25 893

-12,4% 6 660 -28 797

-9,9% 6 398 -31 731

-9,2% 6 126 -34 665

24 353

44 362

44 246

33 035

47 738

54 444

6 140

8 596

4 943

-8 152

4 617

6 867

OQ=OON

PO=UNT

PT=TRV

OV=SMT

PQ=OOQ

QN=MVM

49 100

66 375

77 678

86 390

95 192

103 994

13 939

24 980

32 825

34 025

35 851

37 412

Rating history Fitch (eoy) BBBBBBS&P (eoy) BB+ BBBType of government: Parliamentary Democracy Next elections 2012 Other: Latest PC deal NA SBA 2004 Latest IMF arrangements

BBB BBB-

BBB BBB-

Stock exchange

Romania, Spot Rates, Close 4,5 4,0 3,5 3,0 2,5 2,0 1,5 1,0 0,5 0,0

10000 8000

x e d n I

6000 4000 2000 0 2000

BB+ BB+

2004

2008

EUR/RON USD/RON

94

4,2885 3,334

95

96

97

98

99

00

EUR/RON

01

02

03

04

05

06

07

08

USD/RON

Source: Reuters EcoWin

Source: Reuters EcoWin

Interbank rates

Consumer Prices

55

300

50

275

45 250

40

.a 225 p t n e 200 c er P 175

35

.a p % 30 25 20

150

15

125

10 5 2008

100

2009

1996

Source: Reuters EcoWin

1998

2000

2002

2004

2006

2008 Source: Reuters EcoWin

4

09

SEB Merchant Banking Country Risk Analysis June 21, 2008

=

aáëÅä~áãÉê= = `çåÑáÇÉåíá~äáíó=kçíáÅÉ=

= qÜÉ=áåÑçêã~íáçå=áå=íÜáë=ÇçÅìãÉåí=áë=ÅçåÑáÇÉåíá~ä=~åÇ=ã~ó=åçí=ÄÉ=êÉéêçÇìÅÉÇ=çê= êÉÇáëíêáÄìíÉÇ=íç=~åó=éÉêëçåK= = fãéçêí~åíW=qÜáë=ëí~íÉãÉåí=~ÑÑÉÅíë=óçìê=êáÖÜíë= = qÜÉ=áåÑçêã~íáçå=áå=íÜáë=ÇçÅìãÉåí=Ü~ë=ÄÉÉå=ÅçãéáäÉÇ=Äó=pb_=jÉêÅÜ~åí=_~åâáåÖI=~å= Éåíáíó=ïáíÜáå=pâ~åÇáå~îáëâ~=båëâáäÇ~=_~åâÉå=^_=EéìÄäF=E“pb_ÒFI=Ñçê=áåëíáíìíáçå~ä= áåîÉëíçêë=çåäóK=fí=áë=åçí=áåíÉåÇÉÇ=ÑçêI=~åÇ=ãìëí=åçí=ÄÉ=é~ëëÉÇ=íçI=oÉí~áä=`äáÉåíëK=fÑ=óçì= ~êÉ=åçí=~=ÅäáÉåí=çÑ=çìêëI=óçì=~êÉ=åçí=ÉåíáíäÉÇ=íç=íÜáë=êÉéçêíK=qÜáë=áåÑçêã~íáçå=áë= éêçÇìÅÉÇ=Ñçê=íÜÉ=éêáî~íÉ=áåÑçêã~íáçå=çÑ=êÉÅáéáÉåíëI=~åÇ=pb_=jÉêÅÜ~åí=_~åâáåÖ=áë=åçí= ëçäáÅáíáåÖ=~åó=~Åíáçå=Ä~ëÉÇ=ìéçå=áíK= = léáåáçåë=Åçåí~áåÉÇ=áå=íÜáë=êÉéçêí=êÉéêÉëÉåí=íÜÉ=Ä~åâÛë=éêÉëÉåí=çéáåáçå=çåäó=~åÇ=~êÉ= ëìÄàÉÅí=íç=ÅÜ~åÖÉ=ïáíÜçìí=åçíáÅÉK=^ää=áåÑçêã~íáçå=Åçåí~áåÉÇ=áå=íÜáë=êÉéçêí=Ü~ë=ÄÉÉå= ÅçãéáäÉÇ=áå=ÖççÇ=Ñ~áíÜ=Ñêçã=ëçìêÅÉë=ÄÉäáÉîÉÇ=íç=ÄÉ=êÉäá~ÄäÉK=eçïÉîÉêI=åç= êÉéêÉëÉåí~íáçå=çê=ï~êê~åíóI=ÉñéêÉëëÉÇ=çê=áãéäáÉÇI=áë=ã~ÇÉ=ïáíÜ=êÉëéÉÅí=íç=íÜÉ= ÅçãéäÉíÉåÉëë=çê=~ÅÅìê~Åó=çÑ=áíë=ÅçåíÉåíë=~åÇ=íÜÉ=áåÑçêã~íáçå=áë=åçí=íç=ÄÉ=êÉäáÉÇ=ìéçå= ~ë=~ìíÜçêáí~íáîÉK=oÉÅáéáÉåíë=~êÉ=ìêÖÉÇ=íç=Ä~ëÉ=íÜÉáê=áåîÉëíãÉåí=ÇÉÅáëáçåë=ìéçå=ëìÅÜ= áåîÉëíáÖ~íáçåë=~ë=íÜÉó=ÇÉÉã=åÉÅÉëë~êóK=qÜáë=ÇçÅìãÉåí=áë=ÄÉáåÖ=éêçîáÇÉÇ=Ñçê=óçìê= áåÑçêã~íáçå=çåäóI=~åÇ=åç=ëéÉÅáÑáÅ=~Åíáçåë=~êÉ=ÄÉáåÖ=ëçäáÅáíÉÇ=~ë=~=êÉëìäí=çÑ=áíX=íç=íÜÉ= ÉñíÉåí=éÉêãáííÉÇ=Äó=ä~ïI=åç=äá~Äáäáíó=ïÜ~íëçÉîÉê=áë=~ÅÅÉéíÉÇ=Ñçê=~åó=ÇáêÉÅí=çê= ÅçåëÉèìÉåíá~ä=äçëë=~êáëáåÖ=Ñêçã=ìëÉ=çÑ=íÜáë=ÇçÅìãÉåí=çê=áíë=ÅçåíÉåíëK= = vçìê=~ííÉåíáçå=áë=Çê~ïå=íç=íÜÉ=Ñ~Åí=íÜ~í=~=ãÉãÄÉê=çÑI=çê=~å=Éåíáíó=~ëëçÅá~íÉÇ=ïáíÜI=íÜÉ= Ä~åâ=çê=áíë=~ÑÑáäá~íÉëI=çÑÑáÅÉêëI=ÇáêÉÅíçêëI=ÉãéäçóÉÉë=çê=ëÜ~êÉÜçäÇÉêë=çÑI=ëìÅÜ=ãÉãÄÉêë= ã~ó=Ñêçã=íáãÉ=íç=íáãÉ=E~F=Ü~îÉ=~=äçåÖ=çê=ëÜçêí=éçëáíáçå=áåI=çê=çíÜÉêïáëÉ=é~êíáÅáé~íÉ=áå= íÜÉ=ã~êâÉíë=ÑçêI=íÜÉ=ÅìêêÉåÅáÉë=~åÇ=ëÉÅìêáíáÉë=çÑ=ÅçìåíêáÉë=ãÉåíáçåÉÇ=ÜÉêÉáåI=EÄF=Äìó= çê=ëÉääI=ã~âÉ=~=ã~êâÉí=Eçê=éêçîáÇÉ=äáèìáÇáíóF=áåI=çê=é~êíáÅáé~íÉ=áå=~å=áëëìÉ=çÑ=ëìÅÜ= ëÉÅìêáíáÉë=çê=çéíáçåëI=Ñçê=ïÜáÅÜ=pb_=ã~ó=êÉÅÉáîÉ=ÅçãéÉåë~íáçå= = pb_=áë=~=éìÄäáÅ=Åçãé~åó=áåÅçêéçê~íÉÇ=áå=píçÅâÜçäãI=pïÉÇÉåI=ïáíÜ=äáãáíÉÇ=äá~ÄáäáíóK=fí= áë=~=ãÉãÄÉê=çÑ=íÜÉ=píçÅâÜçäã=píçÅâ=bñÅÜ~åÖÉI=íÜÉ=içåÇçå=píçÅâ=bñÅÜ~åÖÉI=íÜÉ=fmbI= ljI=bauI=bìêçåÉñí=iáÑÑÉI=bìêçåÉñí=m~êáëI=bìêÉñI=`jbI=~åÇ=`_lq=ÉñÅÜ~åÖÉëK=pb_=áë= ~ìíÜçêáòÉÇ=~åÇ=êÉÖìä~íÉÇ=Äó=cáå~åëáåëéÉâíáçåÉå=áå=pïÉÇÉåI=Äó=íÜÉ=cáå~åÅá~ä= pÉêîáÅÉë=^ìíÜçêáíó=Ñçê=íÜÉ=ÅçåÇìÅí=çÑ=ÇÉëáÖå~íÉÇ=áåîÉëíãÉåí=ÄìëáåÉëë=áå=íÜÉ=rhI=~åÇ= Äó=êÉäÉî~åí=êÉÖìä~íçêë=áå=~ää=çíÜÉê=àìêáëÇáÅíáçåë=ïÜÉêÉ=pb_=çéÉê~íÉë=áíë=ÄìëáåÉëëK= = = pb_=jÉêÅÜ~åí=_~åâáåÖK=^ää=êáÖÜíë=êÉëÉêîÉÇK=

5