News

Daily Newsletter - 22 October 2018

Summary

Macroeconomic News (5)

Environment protection spending is 1.2% of GDP

Last year, Romania spent RON 10.3 billion on environment protection, the equivalent of 1.2% of the GDP, with most of the funds going to waste management, according to the National Statistics Institute (INS). The bulk of investment focused on wastewater management and was made by local authorities.

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Price increases close to EU28 average

The price increase data released by Eurostat revealed that Romania was surprisingly close to the EU28 average, ranking between Germany and France. The 4.62% increase is very close to the 4.58% average. However, this position is not the result of striking an optimal balance between revenues and production, but rather the effect of major fiscal changes that cannot be repeated in the future.

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Industrial consumers pay 14% more for electricity

The upward trend of electricity prices is reflected in the bills paid by industrial consumers. While the average price of electricity for the European Union is falling, the local average price is up 14% in one year. Consumers operating in Romania are gradually losing the competitive advantage of low electricity costs.

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Meat imports reached EUR 416 million in H1

Romania imported EUR 416 million worth of meat and meat products in the first half of this year, up 11.6% compared to the corresponding period of 2017, according to information centralized by the National Statistics Institute (INS). The value of meat exports was only EUR 209.5 million, up a meager 2.8% year-on-year.

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UniCredit sees economy slowing down

UniCredit issued a quarterly report forecasting a 3.7% growth rate for the national economy this year and 3.3% in 2019, as the cost of borrowing rises, income growth slows down and fiscal stimulus measures no longer have the same impact.

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Financial News (3)

Young people can take out loans guaranteed by government

Beginning with October 15, young people between the ages of 16 and 26 can borrow up to RON 40,000, while people between the ages of 26 and 55 can borrow up to 35,000. These loans are guaranteed by the state. If the prospective debtor is employed, the maximum loan value goes up by another RON 20,000.

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Raiffeisen Bank expects record revenues in Romania

Martin Gruell, CFO of Austrian banking group Raiffeisen Bank International AG, stated that he expects "record revenues" in Romania, more than EUR 100 million in earnings from Ukraine and continued growth on the Russian market. RBI's business in Romania, Russia and Ukraine is expected to help the bank exceed the target of reaching a 13% Tier 1 capital adequacy rate in the medium term.

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3M ROBOR rate up

The three-month ROBOR rate, which is used to calculate the adjustable interest rates of RON-denominated loans, surged from 3.17% to 3.28% on Friday, October 19. Ciprian Dascalu, Chief-Economist of ING Bank Romania, said the commercial banks fear the BNR would no longer be able to throw cash on the market through repurchasing operations in order to compensate for liquidity deficits.

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Investment News (1)

Government to spend RON 1.7 billion on air force base expansion

The Government approved last month the allocation of RON 1.7 billion for expanding and developing the Campia Turzii air force base. The base will expand by 370 hectares in order to house the five F-16 planes bought by the Government from Portugal, in addition to the 12 planes already based there. The funds will be spent over the next five years, with most of the money going to property condemnation procedures.

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Legislative News (2)

Minister Teodorovici distances himself from ANAF actions

The Minister of Finance, Eugen Teodorovici, distanced himself from ANAF's actions in connection to wedding entertainment taxes and said he would propose a two-year statue of limitation for arrears, instead of the current five. "ANAF should have contacted the ministry first about this matter. I've said it before that ANAF's approach must change," said Teodorovici.

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Minister of Labor says payroll law would be implemented as passed

The Minister of Labor, Lia Olguta Vasilescu, stated that the payroll law would be implemented as passed by the Parliament. The statement was a reaction to Senator Florin Catu's (PNL) decision to make public a document sent by the Cabinet to the European Commission promising to freeze all public salaries.

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Politics (2)

Victor Ponta runs unopposed for party leader at first Pro Romania congress

Victor Ponta was the only candidate running for leader of the Pro Romania party at the congress held at Romexpo on Sunday. The three first vice-president positions were sought by Daniel Constantin, Sorin Campeanu and Nicolae Banicioiu. Florin Jianu and Third District Mayor Negoita attended the congress as guests.

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PM Dancila met with Kuwaiti counterpart

Prime Minister Viorica Dancila met with the Prime Minister of Kuwait, Sheik Jaber Mubarak Al-Hamad Al-Sabah, on Sunday. The two officials focused on the consolidation and expansion of bilateral economic cooperation, as well as on regional and international security issues.

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Social (1)

ANPDCA: 18,012 children had both parents working abroad in June

The total number of Romanian children who had both parents working abroad was 18,012 at the end of June, up 496 from March. The number of children who had at least one parent working abroad was 94,991, according to data centralized by the National Children Right Protection and Adoption Authorities (ANPDCA).

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