Big questions for a tough year ahead

The year 2009 looks set to be a year of questions. Most of these questions concern the most dynamic markets thus far: real estate, automotive and lending.

Will Romania succeed in posting economic growth and how high will it be? How much will the grey economy be able to compensate for the decline of operations in the major companies and in the small and medium-sized enterprises?

How will foreign deficit be funded amid the decline of foreign direct investment and of remittances from Romanians abroad?
How high will the budget deficit be and how much revenue will be possible to collect without resorting to tax hikes?

What could the export growth be if Western economies are even worse hit by recession? Is inflation still a problem considering dwindling demand from consumers that is already putting pressure on prices?

Will banks proceed to rescheduling and changes of terms and maturities for loans for those clients unable to meet the repayment schedule?

Will Banca Carpatica and Banca Transilvania be sold?

How extensive could branch network streamlining and personnel restructuring be in order to reduce costs and maintain profitability?

Will Erste Bank and Raiffeisen Bank, two of the groups with the highest exposure to Central and Eastern Europe and Romania, be taken over? How will leasing companies save their business, seeing as 70% of the financing they grant is for new vehicles?

How will the decline of new car sales influence the insurance market, considering the insurers' business relies on comprehensive and auto liability insurance policies?

How will the vehicle market perform in 2009 after having dropped by more than 50% in the last quarter of 2008 due to the tripling of second-hand car imports and to the more restrictive lending norms?

Will the decline of the price of homes continue, after prices of old apartments in the Capital fell by 20% on average last year, according to the ZF real estate index? Will there be deals with offices or shopping centres at investment yields of more than 10% the same as four or five years ago, considering the market is virtually frozen at the moment?

Who will win the "rent war" in malls, given that retailers in a series of projects are asking for lower rents given the low sales?

Will the Bucharest Stock Exchange rebound after the steep plunge of 2008 or will it continue to go down? How will the stock market indices end the year, will they be higher or lower than they are now?

Will foreign investment funds return to the Stock Exchange, given the uncertainty that persists on the international markets and will Romania's sovereign rating downgrade make its market less attractive?

How many brokerage firms will be left on the market and how many of them will go bankrupt, considering the low traded value will make a strong impact on their revenues and profitability?

Ziarul Financiar