News

Daily Newsletter - 18 October 2019

Summary

FIC (1)

Foreign investors confidence remains low

The latest results of the FIC Business Sentiment Index do not bring significant changes compared with the last iteration in March this year. FIC members' trust in the legislative environment remains low following the debacle of OUG 114/2018 but it has not further deteriorated. Romania continues to score poorly on infrastructure and regulatory burden. Investors have no option but to adapt to the “new normal”, that is a situation of constant lack of predictability where anything might happen at any time. Studies have shown that this lack of predictability have a significant impact on investments, albeit one difficult to quantify. The most worrying indicator right now and the one that continues its steep decline with every edition of the sentiment index for the past three years now is the availability of adequate workforce.


What do foreign investors think about the local business environment?

Political crisis has investors worried

Top

Macroeconomic News (3)

AFIR paid EUR 4 billion to farmers

The Rural Investment Financing Agency (AFIR) has received over 42,000 financing applications worth about EUR 6.05 billion between January, 2017 - October, 2019. The agency paid out EUR 4 billion to farmers, processors, entrepreneurs and public authorities in rural areas on account of these applications.

Top

Ionut Dumitru says budget deficit to pass 3%

The budget deficit will exceed 3% of the Gross Domestic Product this year, climbing to around 4% of GDP, according to Ionut Dumitru, chief economist of Raiffeisen Bank and former president of the Fiscal Council. Dumitru added that there is no time for a new cabinet to correct the situation enough, given that revenue collection is below target, while expenses are higher than expected.

Top

Automotive market up almost 10%

Sales of new cars increased by 9.7% in the first nine months of the year, compared to the corresponding period of 2018, according to statistics published by the Automotive Producers and Importers Association (APIA) on Thursday. In September, the car market grew 15.7% compared to the corresponding month of the previous year.

Top

Financial News (3)

BCR card management system to shut down on Friday night

BCR's card management system will shut down on Friday night, between 1 AM and 5 AM. BCR cards will not function at all during this period.

Top

MFP borrowed RON 350 million

The Ministry of Finance (MFP) borrowed RON 350 million from the commercial banks through two issues of bonds maturing in 2020 and 2034. The average interest rates accepted by MFP were 3.13% and 4.75%, respectively.

Top

OTP Bank Romania wants to double market share

OTP Bank Romania is planning to hire around 400 new employees in the next 12 months. The bank is aiming to reach a market share of 5%, double its current market share. The total current staff reported by the bank is 1,350.

Top

Investment News (1)

Minister Oprea says Volkswagen talks ongoing

The proximity to the Western European markets and the existing infrastructure in the western part of Romania are features that may help Volkswagen decide to choose Romania as the location of its next plant for the VW Passat and Skoda Superb models, according to Stefan Radu Oprea, the Minister for Business Environment. "Today, we resumed our contacts with Volkswagen, we are now carrying out a new program to present our opportunities. The offer can always be improved as a result of negotiations," the minister said.

Top

Legislative News (2)

President Iohannis requested clarifications

The bill adding fines between RON 1,500 and 3,000 for overtime, per employee, to the Labor Code was returned to Parliament unsigned by President Klaus Iohannis. The president asked the Parliament to clarify the range of irregularities targeted by these sanctions.

Top

All type of electronic signatures to have legal power

Electronic signing of legal documents, using advanced signatures, will have the same status and effects as a physical signature, if the written version of a document is requested only as proof of its existence, according to a bill passed by the Senate on Wednesday.

Top

Politics (2)

Dancila says PM-designate cannot nominate commissioner

Viorica Dancila, leader of the Social Democratic Party (PSD), said a prime minister-designate cannot make decisions about Romania's proposal for EU commissioner.

Top

Orban upbeat after ALDE talks

Prime Minister-designate Ludovic Orban said most of the topics raised by ALDE during talks were addressed. "In principle, we have no problems with any of the topics raised by our negotiation partners," said Orban.

Top

Social (1)

Youth poverty puts Romania at top of social inequality index

32.5% of Romania's population faces the risk of poverty and social exclusion, the second highest figure in the European Union, according to Eurostat data. The national median disposable income is RON 15,004 per year for Romania, which means that the poverty and social exclusion reference figure is RON 9,002 per year, the equivalent of RON 750 per month.

Top