From the number of foreign banks opening branches in Bucharest one could be forgiven for thinking that the Romanian market must finally be about to take-off. Don't be fooled. The banks may be there, but as yet the business isn't.
The attitude of bankers involved in Romania ranges from philosophical to lugubrious. "There is a sense of disappointment," says one foreign banker. "Romania was expected to be the next Poland." Mimicking Poland's 6% GDP growth remains a pipe dream for Romania. Indeed, any sort of GDP growth seems pretty far off. Predictions for 1998 see GDP declining by as much as 4.5%. At the start of the year, the finance minister Daniel Daianu was aiming for zero growth. A target that has been scuppered by industrial production which is down by around 20% on 1997.
It's a gloomy picture for those banks which, infected by the over-exuberance that followed the elections of November 1996, set in motion plans to open branches in Bucharest. It is those plans which are now coming to fruition, hence the number of new foreign branches at a time when there seems little real incentive for banks to set up operations.