News

Daily Newsletter - 30 May 2017

Summary

FIC (1)

Romania no longer convinces foreign investors (Source: capital.ro)

The Bucharest University of Economic Studies (ASE) and the Foreign Investors Council (FIC) launched the study entitled Foreign Direct Investments: their evolution and importance for Romania.The main conclusion of the study is that FDIs played a decisive role in the past 20 years and have helped the Romanian economy in its transition to functioning free markets. Considering the large investment needs of Romania, it is likely that foreign investors will continue to play a significant role in the future. Some conclusions of the study that are worth pointing out: Foreign companies employ a third of the work force in the private sector in Romania; Foreign companies are responsible for 70% of Romanian exports; Romania has the lowest stock of FDI/capita in the region; A lot of the FDI in Romania came as equity; Almost half of the Romanian FDI Stock has flowed in industry; Foreign investors contributed significantly to increasing the productivity of the Romanian economy..

Romania no longer convinces foreign investors (Source: diacaf.com)

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Macroeconomic News (4)

CEOs expect hefty business growth 

The CEOs of companies operating in Romania expect a significant increase in activity in manufacturing, construction, services and retail between May and July. They also expect prices to move up, especially in construction and retail, and the pace of hiring to increase moderately, according to INS data.

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Half of biodiesel used in Romania imported from Poland 

Romania imported last year 45% of its biodiesel, while the local rape production was sold as raw materials of little economic value. The local biodiesel producers accused Bulgaria of unfair practices involving Polish fuel, such as buying biodiesel mixed with gasoline from Poland and reselling it at very low prices to other countries.

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Economy confidence index up 

The macroeconomic confidence index published by CFA Romania gained 4 points in April, rising to 60.8 points. The national economy is growing faster than expected, surprising all analysts with a 5.7% surge in the first quarter of this year.

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Lack of local development offsets central deficit 

The general consolidated budget ended the first months of 2017 with a surplus of 0.17% of the estimated GDP, according to data released by the Ministry of Finance (MFP). Public revenues increased by more than RON 6 billion, up 4.8% year-on-year, while the current expenses surged 8.6%.

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Financial News (5)

Most S&L clients are poor and want to repair houses 

More than half of the Romanians who joined the savings&loan system as clients of the only two S&L banks operating in the country are living at the edge of poverty and have very low incomes, according to a survey conducted by IRSOP and commissioned by S&L banking group ABDLR.

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NPL rate down in March 

The NPL rate dropped to 9.36% in March, down 0.22 pp month-on-month, according to data released by the National Bank of Romania (BNR). The annualized trend is -4.16 pp. Deputy BNR governor Liviu Voinea said this year's target NPL rate is 6%.

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More than half of local banks above EU's NPL warning threshold 

Even though Romania has been the biggest seller of NPLs for some years and the NPL rate of the national banking system is now below 10%, the European Banking Authority is still listing Romania among the high risk countries because the NPL rate is above 8%.

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Romanian banking system posts record Q1 earnings 

26 banks, more than two thirds of all the banks operating in Romania, logged profits in the first quarter of this year, while 11 lost money, according to the National Bank of Romania (BNR). The top five banks account for around 80% of the aggregated Q1 earnings.

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BNR knows something is happening 

The National Bank of Romania (BNR) has found that the real estate market is heating up, that the banks prefer to lend to retail clients mainly for house buying, that the banks avoid the industry and that the indebtedness rate is rising. Even though Prima Casa dominates the mortgage market and that all data point to it as a disturbance, BNR makes no comment on whether the program should continue or not.

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Legislative News (2)

Chamber commissions discuss payroll bill 

The unified payroll bill was taken up on Monday by the Chamber's commissions. The Chamber of Deputies has the final say-so on the bill.

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Senate allowed pardon bill to pass 

The pardon bill passed the Senate without being discussed or voted on, according to the announcement read by Senate vice president Claudiu Manda. The bill is now on its way to the Chamber of Deputies.

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Politics (1)

PNL wants to cut social security 

Deputy Florin Roman (PNL) has filed with the Parliament an amendment to the minimum guaranteed income regulations that would stop social security payments to those who refuse jobs. "We know that most of those who are paid the minimum guaranteed income refuse to go to work and prefer to stay home at the state's expense," said Roman.

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