Romania will withstand shocks better than most countries in Central and Eastern Europe (CEE) if Great Britain leaves the European Union, according to a report by Unicredit Bank.

The investors’ risk aversion in the short term may cause a 5% depreciation of the Romanian currency leu in the case of Brexit. The impact will translate into a 0.5 percentage point cut in the GDP growth on the medium term for Romania, according to the report cited by local Profit.ro.

Brexil will have a reduced effect on Romania in the short term, because the foreign investors’ exposure to Romanian bonds is low. Only 18% of the bonds issued by Romania were owned by foreign investors at the end of the first quarter, according to the report. Most of them are investors from the EU, and the capital fluxes will probably be more stable than those in other regions.

Moreover, Romania’s public debt, amounting to 38.1% of the GDP at the end of March, is low compared to those of other countries in the region.

editor@romania-insider.com