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Prime minister has told the latest cabinet sitting that a stability and economic growth were achieved in spite of a complicated enough year. However, the over fulfilment of the most optimistic forecasts for the economic growth achieved this year made some wonder over truth of statistics. But there is no serious reason for the time being to doubt over statistics. I think that the problem is another. The problem rests with quality: what the registered growth consists of and what to expect from it, depending on this composition? Who and what crop will harvest?

If we look at economic growth engines, we mainly see the consumption that rose by about 20 percent and investments in a smaller extent. Theoretically, both investments and consumption have an important contribution to GDP and we should expect at least a similar evolution in the near period. But there are also limits from theoretical viewpoint. These limits are also represented by a shortage of financial, human and material resources besides those existing in the external, industrial and agricultural sectors. The economic growth was not capable to go the same step with expansion of internal demand, while its effects created strong pressures on prices. The first signs of "economic growth" started appearing in inflation, which was 12.7 percent in 11 months. I think that inflation will grow in continuation because the pressure of a booming consumption finally arrives in prices in real economy through salaries and costs. But the level of interests depends on these evolutions and this rate could grow, and this thing is much more important for any investor, domestic or foreign, and it should be part of agenda of NBM officials.

As a rule, we think more about gifts in this period of the year. I would like transparency alone from NBM in 2007. This is a small gift, but capable to protect us from big volatility and losses of economic growth. Hence, by implementing the priority goal of targeting inflation, the central bank should give more transparency and continuity. Unfortunately, it is not so. It has favoured the appreciation of the leu through massive currency purchases. The current account deficit has rapidly increased on basis of stimulation of imports. But these are only long-term effects. Let’s study the causes. Contradictory signals from NBM led to a higher volatility, reduced the saving and investment power of population. All these happened with the risk of some repercussions for the long-term economic growth because population consumes instead of saving money.

What is behind this attitude? Higher interests mean higher financing costs and lower investments. High interests maintain inflationist expectations for a longer period, which are translated through substitution of saving and investments with consumption. This attitude induced to population and firms on a short term multiplies the GDP, but it will mean only higher prices and more painful reforms on long term. What should NBM do? It should communicate more. Members of the central bank boards in developed countries seize any occasion to give information to market in order to guide it not to go too much one or another direction. We must have at least a resume of talks held in the NBM Management Board, in order to learn the concerns of leading bankers of the country. This way, the central bank would give more information about evolution of interests and would ease the life of those willing to save money and to invest for a long term.

As regards investments (I mean foreign investments only), they are directed more to distribution of electricity and gas, telecommunications, banks, sectors with maximum and sure profitability. Domestic capital remained in second-ranking sectors where profit is hardly raised and with big investment efforts. Of course, foreign investments, which are not very strong but are influent compared with investments of entities with domestic capital, produce however economic growth, but with a low employment rate and polarised distribution of its crops. Statistics illustrate this fact. The best proof is that the employment stagnates for a strong economic growth on one hand, failing to increase the number of jobs, while on the other hand, an insignificant number of people benefit of crops of this economic growth, but most of them do not enjoy anything. We have a big or small economic growth, but it is not healthy. Let’s hope that 2007 will be more productive, while common people will also feel it. Happy New Year!