The Romanian capital market performed spectacularly in 2023, and is becoming one of the key pillars of the Romanian financial system.
Cosmin Marinesu, an economist who is an adviser to Romanian President Klaus Iohannis, , writes that despite a difficult world economic context, still reeling from recent crises, Romanian financial experts are optimistic about investments, trade and financing flows and a disinflationary (Eds: a temporary slowing of the pace of price inflation) trend at global and European level.
“But economic stability still requires increased concerns, including the protection of markets and economic competitiveness, especially in industry,” he warned in a recent speech to the BVB stock exchange.
Investment projects funded by European money are the main “engine” of Romania’s economy. However, the new year started with a surge in inflation, which disrupted the disinflationary trend of 2023 and requires cautious economic policies.
One of the main objectives of the governing coalition is to ensure Romania’s economic stability and financial sustainability, a national objective which is even more important in an election year that comes after multiple crises.
In relation to this objective, the election year also “imposes a certain responsibility in terms of the public message, democratic values and principles that we want to promote for the future. That is why we must beware of the traps of promises that sell illusions, of extremist solutions, that lack responsibility,” he said.
“In the long run, economic populism turns us all into losers. That is why we need credible solutions for Romania, balanced solutions that offer our economy guarantees of long-term stability and predictabilit,” LSE-educated Mr. Marinescu said.
Here’s Mr. Marinescu’s speech made at the opening of the 11th BVB Awards 2024.
“Mr. President of the Bucharest Stock Exchange,
Dear representatives of the Government of Romania,
Ambassador of the Republic of Moldova to Romania,
Dear representatives of regulatory authorities,
Distinguished guests,
I am glad to be with you at this 11th edition of BVB Awards, an event dedicated to awarding the performers of the Romanian capital market.
I would like to congratulate the Bucharest Stock Exchange for its ambition to become a key pillar of the Romanian financial system, but also for its consistency in awarding the successes of the capital market, in a complicated period, marked by various uncertainties and economic challenges, but also political and security.
I also congratulate the companies that contribute to the development of our capital market. Your performances are the ones that support Romania’s economic growth and, at the same time, create new business opportunities for the Romanian entrepreneurial environment.
Ladies and gentlemen,
The successes of the Romanian capital market over the past year were achieved in a not easy economic context, in which the echoes of recent crises continue to be felt on world economies.
The COVID-19 pandemic, the invasion of Ukraine by the Russian Federation followed by the energy crisis, the explosion of inflation and the tightening of monetary conditions globally, combined with the recent conflict in the Middle East, are events with a profound and lasting impact on the world economy, which has experienced the highest density of crises in decades.
In Europe, 2023 saw downward revisions to growth forecasts. The latest estimates point to economic growth of just 0.5% for the European Union, with a slight acceleration in 2024. However, expectations regarding investments, trade and financing flows, as well as the disinflationary trend at global and European level remain optimistic.
For Romania, despite a certain slowdown, economic growth in 2023 remains high, at 2% annually, a performance higher than the European average. Good signs come from the change in the contribution of factors to economic growth, through consistent advances from investments. Investment projects from European funds are already the main “engine” of our economy in these years.
But economic stability still requires increased concerns, including to protect our markets and competitiveness, particularly in industry but beyond. The year 2024 started with the reactivation of inflation, which interrupts the disinflationary trend of 2023 and therefore requires caution in economic policy.
An essential objective of the governing coalition is to ensure Romania’s economic stability and financial sustainability, a national objective all the more important in an election year that follows multiple crises.
In relation to this objective, the 2024 electoral year imposes a certain responsibility also in terms of the public message, in terms of democratic values and principles that we want to promote for the future. That is why we must beware of the traps of promises that sell illusions, of extremist solutions, devoid of responsibility.
In the long run, economic populism turns us all into losers. That is why we need credible solutions for Romania, balanced solutions that offer our economy guarantees of long-term stability and predictability!
Ladies and gentlemen,
As you know, Romania has, since May last year, a national strategy on the development of the capital market. It must be used pragmatically and efficiently, through ambitious changes and appropriate results.
A mature, competitive capital market, able to efficiently support the financing needs of the economy, is an asset from the perspective of the objective for Romania to switch to an investment-based economic development model.
The increase in listings and participation of different categories of investors on the capital market, still far below the real potential of our market, will bring new financing and business opportunities. Whether we refer to the presence of a company on the main market or on the AeRO market, we are talking about financial benefits, credibility advantages and quality of governance.
In an investment-based development model, Romania’s economy needs financing. In the coming years, funding will become a key criterion in the dynamics of the financial system and for the efficiency of the regulatory framework.
The open cooperation between the Financial Supervisory Authority, the Stock Exchange and the players in the business environment is, however, the key to success in this approach, a principled one with a development vision for the Romanian economy.
As presidential adviser, I had the opportunity, during my 9 years of activity, to discuss with numerous representatives of the business environment about how they see Romania’s economic future, about how we can do things better, with responsibility and dedication. And I assure you that there is full interest in dialogue and participation in a joint and constructive effort for the good of our economy.
In this respect, I want my presence here to be seen also as an invitation from the presidential institution for a more active involvement of stakeholders and actors in the financial system, in order to strengthen Romania’s competitive advantages, including in terms of the capital market.
This orientation towards the future requires increased concerns also in the direction of financial education, as a long-term national asset. A strong economic and financial knowledge base is indispensable in building a resilient and prosperous economy.
Dear guests,
As the organizers of this event well point out, 2023 was one of the best years in the history of the Bucharest Stock Exchange.
The market capitalization exceeded RON 300 billion, the trading value on the market increased by over 50%, and the attracted financing reached record values, as in the case of Hidroelectrica’s listing. All this naturally generates new expectations and new ambitions in relation to our capital market.
Accelerating technological advancement in the context of the digital and green transitions generates new investment opportunities. We already see that improving institutional communication and increasing transparency in investor relations have an important catalytic role, both in strengthening the Romanian capital market and in developing the Capital Markets Union in the European Union.
The regulatory authorities, and I am not referring here only to ASF, must actively and visionarily support this modernization process. In the world of interconnected economies, companies and investors need sustainable public policies, a clear and balanced legislative framework that provides incentives and predictability.
Ladies and gentlemen,
I congratulate companies, issuers and institutional investors, intermediaries and capital market promoters for last year’s achievements. Your results have made the “stock market story” of 2023 a successful one. One that deserves to be promoted and taken as a benchmark for years to come.
I wish you to remain consistent in your efforts and ambitions, and the results to be commensurate! Thank you!”
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