Isărescu is optimistic: I think the economy is starting to turn around

• NBR governor and Romanian FinMin: We can already say that the crisis is starting to ebb

• The Central Bank is worried that the leu could gain excessively

The economy is in a recovery, while inflation will continue to drop, the governor of the NBR, Mugur Isărescu and Finance Minister Sebastian Vlădescu said yesterday.

"There is no need for concern, we are on the right path. The effects of our cautious approach, which includes the loan agreements with the international financial institutions, are beginning to yield results, and one such example is the change of the outlook on our exchange rate, which in December, some analysts were expecting to go to 4.6 lei/Euro, and right now the NBR is concerned it could rise too much", Isărescu said, but declined to provide additional details, since he doesn"t want to participate in the "great national guessing game".

In the opinion of the NBR governor, right now, Romania first of all needs serious debates on economic and financial issues, instead of televised talk-shows which discredit these subjects.

"It seems to be a national hobby, throwing around forecasts about the inflation or economic growth numbers for 2010. It"s extremely important that discussions on these subjects be taken seriously", Isărescu said.

On the other hand, Sebastian Vlădescu cheered the optimism of the governor of the NBR, and said that Romania "was extremely lucky" that it had a solid banking system.

"I am happy that governor Mugur Isărescu is optimistic, since it is important for all of us. Moreover, if we managed to overcome the 1997-2000 period, when our level of poverty was much higher, I think we"ll do just fine now", the Minister of Finance said.

Concerning Romania"s ability to overcome the crisis, Sebastian Vlădescu said: "It is a good thing there is competition, people need to learn to get by. Exiting the crisis depends on the actions of the government and of the NBR, but also on those of every Romanian, out of those who invested, on the individual and collective effort of various interest groups".

Even though long-term outlook remains positive, the budget for pensions and wages remains insufficient.

"Romania can"t secure budget revenues greater than 32% of the GDP", the NBR governor said, mentioning that he doesn"t see the Romanian economy exiting recession exclusively by generating revenues for the payment of pensions. "If wages drop and the economy doesn"t recover, pensions will shrink as well", Isărescu concluded.