News

Daily Newsletter - 6 December 2017

Summary

Macroeconomic News (4)

National retail growth rate above EU average 

The volume of retail trade climbed 12.6% in October, compared to the corresponding month of 2016. Romania had the highest retail growth rate in the European Union for the third consecutive month, along with the highest annual growth rate in the EU, according to Eurostat data. The highest growth rates came from Romania (12.6%), Poland (7.1%), Ireland, Hungary and Malta (6.3%). By comparison, October retail sales dropped 1.1% in the European Union and 0.5% in the Eurozone.

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INS confirms economic growth rate 

The National Statistics Institute (INS) confirmed on Tuesday the estimates released in mid-November, which put the GDP growth rate at 8.8% for the third quarter of this year. The data released in November showed the economy growing at a faster pace compared to the second quarter. Final household consumption was the main growth drive (6.1%), followed by gross capital formation. Net exports had a negative contribution to the GDP growth rate.

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Labor cost up in Q3 

The hourly cost of labor, an indicator of the employers' payroll burden, showed a gross increase of 17.85% in the third quarter of this year, compared to the corresponding period of 2016. The highest growth rates were reported by the entertainment, medical and social assistance, education and public administration sectors, according to information released by the National Statistics Institute (INS) on Tuesday. The cost of labor had increased by 20% in the second quarter and 18.2% in the first one.

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European Council asks Romania to correct structure deficit 

The European Council adopted on Tuesday a decision that criticizes Romania for "not taking steps to correct the significant deviation" from the structural budget deficit, according to a press release. The Council also issued a new recommendation, at the European Commission's request, which revises the previous one, in compliance with the significant deviation procedure. Romania was asked to correct its deficit by 0.8% of GDP, a bigger figure than before.

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Financial News (4)

ROBOR rate reached 2.22% 

The three-month ROBOR rate, which is used to calculate the interest rats of most RON-denominated loans, reached 2.22% on Tuesday, the highest level since October 27, 2014. The six-month rate stayed at 2.35% on Tuesday.

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Garanti Leasing granted more than EUR 63 million in Q1-Q3 financing 

Garanti Leasing, the financial leasing arm of Garanti Bank, granted more than EUR 63 million in financing in the first three quarters of this year, roughly similar to the corresponding period of 2016. The company signed more than 1,000 new contracts and has a market share of less than 4%, based on market data collected by the Association of Financial Companies (ALB).

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Real estate prices and down payment rates fall in Prima Casa's absence 

Real estate prices rise faster when the banks sell many mortgages. The Prima Casa program made it easier for both clients and banks to push prices higher. In order to make up for the drop in public funds, the banks slashed the down payment rates from 26% to 22%, according to the financial stability report released by the National Bank of Romania (BNR).

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BNR: "Debtors would be better protected if they took out flat rate loans" 

Liviu Voinea, Deputy Governor of the National Bank of Romania (BNR), stated that the NPL rate had dropped below 8%, which puts Romania in the medium risk zone, according to the European Banking Authority. In the past three years, Romania had the fastest NPL adjustment rate in the European Union. "Preliminary estimates show the NPL rate could surge from 5.8% to 7.3% in one year if the interest rate increased by 200 base points," said Voinea.

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Investment News (1)

Three calls for projects 

The Ministry of Education (MEN) and the Ministry of Regional Development, Public Administration and EU Funds (MDRAPFE) issued on Tuesday three calls for projects worth approximately EUR 258 million. The projects must focus on the construction, rehabilitation, modernization, expansion and furnishing of creches, kindergartens, schools and high schools. MEN and the POR Management Authority expect that more than 10,000 preschoolers, 19,000 primary school students and 6,000 high school students will benefit from these infrastructure projects.

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Legislative News (2)

New judiciary rules 

Court rulings will have to be drafted within 30 days from being handed down, with up to two 30-day extensions allowed only in special cases. This rule is part of the bill adopted by the members of the Special Commission tasked with coming up with new judiciary rules. The amendment was put forward by PSD members and was backed by a majority of members.

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PMB takes aim at taxi drivers 

The Bucharest City Hall (PMB) wants to issue "clear rules" for taxi drivers. Under the new rules, drivers are supposed to be dressed in civilized attire, use proper language, keep their cars clean and guarantee the safety of citizens, according to city officials.

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Politics (1)

President Iohannis sends condolences to Royal Family

President Klaus Iohannis sent a letter of condolences to Her Royal Highness Crown Princess Margareta on Tuesday. "Through the way he acted as head of our state, through his courage and efforts, Mihai I transformed the 'King and Country' concept into one that defined his entire life. With faith and confidence in his mission, Mihai I reigned in times when our democracy was put to a harsh test and observance of human rights was a difficult mission," reads the President's letter.

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