News

Daily Newsletter - 12 December 2019

Summary

Macroeconomic News (3)

Inflation rate at 3.77%

The annual inflation rate increased to 3.77% in November, compared to 3.4% in October. Food prices jumped 4.9% over the past year, according to data released by the National Statistics Institute (INS), while non-food goods jumped 2.83% in price.

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Standard &Poor's (S&P) revised Romania's country rating outlook from "stable" to "negative"

Standard &Poor's (S&P) maintained Romania's country rating, but revised the outlook from "stable" to "negative". The deterioration is the result of rising trade and budget deficits. The current rating for Romania's government debt is BBB-/A-3, the lowest investment grade rating.

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SMEs account for 99.7% of all companies, 66% of employees

Romania has over 430,000 micro-enterprises and more than 50,000 small and medium-sized businesses. By comparison, there are only 1,667 large businesses, the equivalent of 0.3% of the total, according to an analysis by the European Commission. SMEs employ almost two thirds of all employees. However, the average productivity of these small and medium-sized businesses is EUR 15,100, well below the EU average of around EUR 44,600.

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Financial News (3)

Citu: Bank tax to be repealed, sovereign fund to be disbanded

The Minister of Finance, Florin Citu, stated on Tuesday evening that the Cabinet would repeal a series of taxes implemented by Decree 114/2018, such as the tax on financial assets. The sovereign fund (FSI) that the Social Democrats tries to got off the ground would be disbanded.

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Raiffeisen Bank launches contactless payment solution

Raiffeisen Bank announced the launching of Garmin Pay, a contactless payment solution for the users of Garmin watches, which includes interest-free installment plans. The service is free of charge both in Romania and abroad, and payments carry no additional fees and charges.

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Banks skip deposit auction

The National Bank of Romania (BNR) did not offer 7-day deposits at Monday's auction, which could indicate a drop in liquidity on the inter-bank market. At the beginning of last week, BNR took only RON 205 million off the inter-bank market, at 2.5% per year.

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Investment News (2)

Government borrowed EUR 180 million for two prisons

The Cabinet adopted a bill for borrowing EUR 177 million from the Council of Europe's Development Bank in order to build two penitentiaries in the Prahova and Buzau counties, along with a staff training facility.

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Rosti Group builds plastic factory in Romania

Swedish company Rosti Group is expanding its Romanian operations with the construction of a new plastic factory. The new facility is expected to open next summer. Rosti Group is already operating a plastic factory in the country.

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Legislative News (2)

Senate passed Zamfir's bills

The Senate passed new debtor protection measures on Wednesday, targeting the abuses that banks, NBFIs and debt collectors engage in. The four bills were drafted and submitted by Senator Zamfir and lawyer Gheorghe Piperea.

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PSD blocks cabinet

On Wednesday, the Senate rejected the Cabinet's request to be allowed to issue decrees during the winter recess. The request was defeated in a 45-44 vote. The Cabinet was planning to amend the VAT rules and the Tax Code during the recess.

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Politics (1)

PM Orban met with cabinet supporters

Prime Minister Ludovic Orban met with representatives of the MP groups that supported the current Cabinet: Save Romania Union (USR), ALDE, Democratic Union of Romanian Magyars (UDMR), Pro Romania, People's Movement Party and the ethnic minority MPs. The talks focused on the bills that the Cabinet wants to pass using the special procedure.

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Social (1)

Income tax exemption for elderly who rent to young people

A bill was introduced with the purpose of exempting from the income tax the elderly who rent residential space to students and young people leaving the protection system.

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