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Although the debt repayment naturally pushes the stock of loans down (other things ignored) at various rates depending on the type of loan (of its maturity or repayment schedule), the shift towards refinancing – counted as a new business – as opposed to genuine new loans extended to new customers was thus massive.
The increase in the refinancing business (not nonexistent in the past) can be estimated at some €6bn compared to the total €10bn “new loans” (refinancing included) in the 12-month period to the end of September 2023.
Overall, the volume of new retail loans was RON54bn over the past year, but the stock of retail loans has not changed. In fact, the consumer loans have a high turnover rate and it is reasonable to assume that a significant volume of genuine consumer loans were issued. The same cannot be said for mortgage loans, where the stock of loans actually decreased.
5.9.3 Industry
Romania's industrial production contracted by 5.1% y/y in the 12 months to November 2023, with the core manufacturing industries showing a somewhat slower decline of 4.5% y/y.
The annual decline was 4.6% y/y in each of the second and third quarters of the year. It sweetened slightly in October to 2.3% y/y but this doesn’t change the overall picture.
The government expects industry to bottom out in 2024 and post significant growth rates in the years to come: +3.5% in 2025 and +4.2% in 2026. The value added generated by the sector is expected to advance slightly faster given the shift of industrial structure towards higher value-added industries.
This remains a scenario supported at this moment only by hopes for large infrastructure projects providing an impetus to horizontal industries. The Recovery and Resilience Facility money and other projects, such as Neptun Deep offshore, are the sole relevant drivers at this moment, when Europe’s economy is not thriving.
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