News

Daily Newsletter - 1 March 2017

Summary

Macroeconomic News (5)

Consolidated budget revenues down 5.7% in January (Source: bursa.ro; Date: 2017-02-28; Author: Unspecified)

The consolidated budget's revenues dropped 5.7% in January, mainly because of a 24.8% fall in VAT revenues. However, economic analyst Aurelian Dochia, an administrator with BRD-GSG, said that the VAT reduction effects have already been absorbed.

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Romania has lowest regional competitiveness in EU (Source: profit.ro; Date: 2017-02-28; Author: Unspecified)

Romania ranks at the bottom of the European Union's regional competitiveness index, with five of the country's eight regions scoring less than 10 points in the latest edition. Bucharest-Ilfov scored 45 points, which is still far from regions with comparable GDP per capita.

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Real economy: Profits of large companies in 2016 hide consumption increase tensions. Dividend ranking (Source: cursdeguvernare.ro; Date: 2017-02-28; Author: Unspecified)

The tensions hidden by Romania’s economic growth in 2016 (4.8%) are visible in the results of the 20 largest Romanian companies listed on the Bucharest Stock Exchange (BSE), according to their data reported to the stock exchange. The 2016 results of the companies from the BSE Top 20 “suggest that the economic growth was based mainly on consumption and investment with no speed,” said Mihai Purcarea, CEO of BRD Asset Management, for cursdeguvernare.ro. The industrial companies have gained if they had a direct connection with the end consumer, such as OMV Petrom (SNP) through its gas stations network, which was not true for the energy companies such as Electrica (EL). SNP benefited from the increasing prices of its products, but Electrica – did not.

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Watch the public debt! Watch the interest rates! (Source: cursdeguvernare.ro; Date: 2017-02-28; Author: Unspecified)

Data released by the Ministry of Finance regarding the amounts due this year in order to service the public debt require some explanations since 2018 and 2019 seem to bring a payment spike that does not match the Cabinet's generous welfare policy.

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Almost third of subsidies went to welfare (Source: euractiv.ro; Date: 2017-02-28; Author: Unspecified)

The development of the national agriculture sector was held back by the fact that more than 30% of subsidies went to welfare and that the amounts distributed to farmers were not always enough to boost growth.

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Financial News (3)

Romanian banks make billions (Source: capital.ro; Date: 2017-02-28; Author: Unspecified)

BCR, the country's top bank, logged more than RON 1 billion in earnings for 2016, up 14% year-on-year and almost a fifth of Erste Group's aggregated earnings. Banca Transilvania posted RON 1.2 billion in earnings, while BRD made RON 763 million.

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BCR logs more than RON 1 billion in earnings (Source: economica.net; Date: 2017-02-28; Author: Unspecified)

BCR has posted more than RON 1 billion in earnings for 2016, the result of ongoing development and improvements in the quality of its portfolio, according to a press release. However, last year's earnings were 16.9% lower compared to 2015 because of the higher investment spending.

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Foreign banks ignore Romanian companies (Source: zf.ro; Date: 2017-02-28; Author: Unspecified)

Corporate and retail borrowing increased by only 3% between 2010 and 2015, from RON 209 billion to RON 216 billion, according to the statistical data released by the INS. On the other hand, the commercial banks, owned mostly by foreign interests, increased their exposure to the government by 50%.

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Investment News (2)

City Hall to set up own holding (Source: profit.ro; Date: 2017-02-28; Author: Unspecified)

The Bucharest City Council approved on Tuesday, thanks to the PSD-ALDE majority, the setting up of 19 companies controlled by the City Hall that would provide utility services, including electricity, public lighting, hospital management etc.

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Iulius to invest EUR 11 million in Openville parking (Source: zf.ro; Date: 2017-02-28; Author: Unspecified)

Iulius, the real estate development company owned by Iasi businessman Iulian Dascalu, will invest EUR 11 million in a parking building that will be included in the Openville Timisoara ensemble.

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Legislative News (2)

Commission reports out ED 9 (Source: economica.net; Date: 2017-02-28; Author: Unspecified)

The Senate's Labor Commission reported out favorably the Emergency Decree 9, which came under heavy fire for allowing the public authorities to borrow beyond their budgets. The amendment introduced by PNL, USR and PMP was rejected.

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CSM approves pardon bill (Source: news.ro; Date: 2017-02-28; Author: Unspecified)

The Superior Council of Magistrates (CSM) approved on Tuesday the bill that would pardon certain sentences. The bill had been drafted by the Ministry of Justice. The approval came with two objections.

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Politics (1)

Liviu Dragnea accepts Ponta criticism (Source: romanialibera.ro; Date: 2017-02-28; Author: Unspecified)

Liviu Dragnea, president of the Social Democratic Party (PSD), accepted on Tuesday the criticism voiced by Victor Ponta and called it "a very healthy thing".

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