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Daily Newsletter - 7 December 2017

Summary

Macroeconomic News (4)

Cabinet passes deficit measures 

The Cabinet approved at the Wednesday meeting a series of measures designed to keep public spending sustainable and the budget deficit below 3% of the GDP, as per EU regulations. This includes a number of restrictions on public spending, including the acquisition of vehicles, furniture and office equipment.

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Additional funds for diesel subsidy 

The budget for this year's agricultural diesel subsidies was increased by RON 116.9 million at Wednesday's Cabinet meeting. The total budget increased from RON 436.9 million to RON 555.8 million. This is the second increase this year, given that the initial budget was RON 349.4 million.

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Analysts surprised by Romania's huge economic growth 

The 8.8% economic growth rate calculated for the third quarter of this year was confirmed by the latest figures. The increase is around 3 pp higher than expected by UniCredit's analysts and by the rest of the market. The main drive behind this amazing achievement was the agriculture sector, with the autumn harvest accounting for 67% of the surprise growth. At the same time, the construction sector contracted less than expected.

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Fiscal Council blasts draft budget 

The Fiscal Council published on Wednesday a preliminary opinion of the draft state budget for 2018. According to the Council, the budget is part of the government's pro-cyclic fiscal policy, which worsens the deviation from the medium-term targets and is in breach of the Fiscal-Budget Responsibility Law.

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Financial News (5)

BT shares fall to six-month low 

Banca Transilvania's shares dropped 1.4% on Wednesday, closing at RON 2.085, a six-month low, according to the Bucharest Stock Exchange (BVB). The bank's market capitalization is now RON 9.051 billion, behind BRD's RON 9.059 billion. By comparison, BRD's shares closed at RON 13, same as the previous trading session.

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ANPC reports surge in financial complaints 

The number of complaints received by the National Consumer Protection Authority (ANPC) regarding the services of financial companies is up eight-fold in the past five years, reaching a total of 10,476 at the end of 2016, according to ANPC president Bogdan Pandelica. The ANPC president noted that most complaints focus on abusive contracts terms, interest rates and late charges.

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ROBOR rate falls to 2.18% 

The three-month ROBOR rate, which is used to calculate the interest rates of most RON-denominated loans, dropped to 2.18%, according to the National Bank of Romania (BNR). The rate peaked at 2.22% on Tuesday, the highest figure since October, 2014.

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7,900 Romanian home owners handed in keys 

The number of Romanians who decided to turn in their keys and walk away from debts is only 7,900. The aggregated value of the 7,900 relief requests is RON 2.2 billion, according to the financial stability report published by the National Bank of Romania (BNR). Loans denominated in Swiss francs account for 42% of these requests.

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BNR conducts stress tests, won't publish results 

The National Bank of Romania (BNR) conducted a series of banking stress tests in September, using two risk scenarios based on the European Banking Authority's methods. The banks are expected to see their equity fall, but not below the national threshold. However, BNR announced that it would not release the test results for each bank.

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Investment News (2)

OMV Petrom spent EUR 49 million on social responsibility projects 

OMV Petrom, the biggest oil and gas company in South-Eastern Europe, announced on Wednesday that it had spent a total of EUR 49 million on social responsibility projects in the past 10 years. The company's projects focused on environment protection, education, health, community development and volunteer work.

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Plexus expanded Oradea design center 

Plexus, a US-based provider of electronic systems and design software, has expanded its Oradea testing and design center. The company has invested more than USD 50 million in Romania so far. The expansion serves to consolidate Plexus' position in Europe, given the rising demand for design and engineering services.

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Legislative News (1)

Changes to medical and education payroll rules 

The Cabinet approved on Wednesday a draft decree that would amend and complete LAw 153/2017, regarding the salaries of public personnel. Most of the decree's stipulations focus on medical and education personnel.

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