Romania's Sustainable Development Requirements from the Viewpoint of Regional Economic Bank's Crediting

This paper is trying to highlight some qualitative and quantitative characteristics of the relationship between regional GDP and loans, both in foreign exchange and lei, for Romania. Taking into consideration the vital importance of funding the national economy by crediting, especially under crisis and after crisis circumstances, we analyzed the influence of regional loans in lei and foreign currency on the size of GDP at county level. The main objective is to establish the relationship or the extent to which the magnitude of regional crediting is connected with the level of economic and social development of counties. On the other hand we tried to identify several groups of counties depending on the size of their credit relative to national average. We regressed GDP on loans in foreign exchange and in lei, using up to two years lags. The main result is that, as expected, both loans in foreign exchange and in lei have positive and statistically significant influence on GDP at county level. We also found that all lagged regressors are statistically insignificant and only the contemporaneous variables influence the GDP. This suggests that loans are not an important investment channel in Romania, since they are mainly used for consumption, debts payment and have only short-term multiplier effects on local economies.