Forecasting credit growth rate in Romania: from credit boom to credit crunch?

MPRA Paper from University Library of Munich, Germany

Abstract: The specialists paid a special attention to credit growth in the transitions countries due to its sharp increase during the last years. However, once the financial crisis started in 2008, the credit activity evolution reversed. Consequently, forecasting the credit trend has become a subject of interest in the context of the present financial and economic conditions, because the credit market blockage has a negative impact on economic activity revival and leads to the amplification of the uncertainty on financial markets. The main objective of this paper is to highlight the recent credit developments in Romania and to predict their future evolution. Based on the credit growth rate endogenous factors and using a stochastic simulation econometric model, we demonstrate that this economy experiences a passage from a credit boom to a severe credit crunch. The forecasting exercise results show a credit activity contraction up to the end of 2009, demolishing the expectations related to a near economic recovery in Romania.

Keywords: credit growth rate; forecasts; stochastic simulation; credit crunch (search for similar items in EconPapers)
JEL-codes: C15 C53 E51 (search for similar items in EconPapers)
Date: 2009-07-26, Revised 2009-08-10
New Economics Papers: this item is included in nep-ban, nep-for and nep-tra
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Citations: View citations in EconPapers (4)

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Related works:
Journal Article: FORECASTING CREDIT GROWTH RATE IN ROMANIA: FROM CREDIT BOOM TO CREDIT CRUNCH? (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:16740

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