The economic risks generated by Ukraine-Russia tensions are “manageable,” Romanian central bank governor Mugur Isarescu estimates, according to his presentation at a banking conference earlier this week. Trade restrictions or disruptions may affect exports and/or energy supply, yet the risks appear controllable.

Earlier this week, an EC report leaked in local media revealed that the EU setting sanctions to Russia would have a negative impact of 0.1pps to 0.6pps to this year’s GDP, depending on the magnitude of the sanctions.

IMPACT ON EXPORTS - MODERATE. Exports to Russia and Ukraine account for only 4.7% of Romania’s exports – therefore a 10% fall in the value of exports to these countries, assuming no replacement, would shave 0.16pps off the growth rate of Romania’s GDP

IMPACT OF NATURAL GAS SUPPLY - MODERATE. Romania produces 80% of the natural gas it uses – therefore even a total shutdown in gas imports may be weathered without tangible disruptions at least until November-December.

RUSSIAN CAPITAL IN ROMANIA - NO SYSTEMIC IMPORTANCE. Russian capital has a significant presence in the iron and steel, aluminium metallurgy and oil refining sectors, yet none of the Russian-owned companies can be deemed to be of systemic importance.

IMPACT ON FINANCIAL SECTOR - INDIRECT. Since there is no Russian or Ukrainian capital in Romania's banking system, the impact would be via the exposure of Austrian and French banks to Russia and Ukraine. Austrian banks have the highest exposure to Russia, of EUR 38bn [USD 52bn], HotNews reads, quoting Fitch rating agency. However, the comfortable solvency and liquidity buffers in the Romanian banking system should help alleviate such spillovers in case they materialize, governor Isarescu estimates.