News

Daily Newsletter - 1 August 2018

Summary

Macroeconomic News (3)

Economic growth outlook at four-year low

Despite some gains in consumer sentiment, confidence in the service sector is at a three-year low and it has dragged the general expectations to the lowest level since September, 2014, according to a study published by ING Bank Romania. After falling for five of the first six months of this year, consumer sentiment rallied sharply in July.

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Vulnerable Romania

Romanian exports are not diversified enough and, thus, are very easily disturbed any the demand fluctuations caused by the economic cycle. Germany, Italy and France account for 22.9%, 11.2% and 6.8% of the country's EUR 62.64 billion exports reported for 2017. The European Union is the destination for more than three quarters of Romanian exports.

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Microenterprise situation is bad

The state of Romanian microenterprises has been deteriorating over the past decade, according to Iancu Guda, President of the Romanian Finance-Banking Analysts Association (AAFBR). While big companies can handle external challenges with the help of know-how, secure and cheap access to financing, economies of scale and favorable terms from partners, microenterprises proved very vulnerable to economic shocks.

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Financial News (3)

Banks risk only local deposits

When it comes to taking a chance on the national economy, the commercial banks prefer to risk only the deposits attracted from Romanians. At the same time, the banks' profit margins are soaring thanks to the spread between the lending and savings interest rates.

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Retail borrowing up 50%

BCR posted RON 697 million in earnings for the first half of this year, up more than 228% year-on-year. The bank reported a hefty 50% increase in retail lending, compared to the corresponding period of 2017, thus consolidating its position as the main source of financing for Romanians who want to buy their own houses.

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Real estate market shows first drop in three years

The prices demanded for flats and houses put on sale increased by 1.4% in the second quarter of this year, compared to the previous quarter. "Beginning with the second half of last year, the growth rates of prices started falling because of volatility in Prima Casa demand and a general drop in available properties," said Adrian Erimescu, CEO of Imobiliare.ro.

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Investment News (2)

Alpa buys new local plant

Alpa, an Austrian producer of plastic packaging and the top player of the EU market, has bought the Romanian operations of Greek company Argo. Argo had entered the national market in 1996 and owned a plant in Bucharest's Berceni neighborhood. The acquisition is currently being reviewed by the competition watchdog.

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Total value of POR 2014-2020 projects reached EUR 410 million

The aggregated value of the projects contracted by the Central Region under the 2014-2020 Regional Operations Program (POR) is close to EUR 410 million. Most of the beneficiaries are microenterprises, according to data released on Tuesday by the Regional Development Council (CDR).

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Legislative News (2)

CNSP to handle PPP investments

President Klaus Iohannis signed on Tuesday the law giving the National Strategy and Forecast Commission (CNSP) the power to manage the strategic investment projects implemented through public-private partnerships. CNSP has thus become the central analysis and contracting unit for such projects.

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Cabinet promises new car tax

The regulations for the new car tax will be ready by the end of the year, according to statements made by the Minister of Environment, Gratiela Gavrilescu, on Tuesday. "I don't want a repeat of previous mistakes. I want the new calculation formula to be unimpeachable. The penalties should be paid by those who pollute," said Gavrilescu.

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Politics (1)

Minister of Justice said Attorney General biased

The Minister of Justice, Tudorel Toade, stated that Attorney General Augustin Lazar had taken in the past "positions that were not in line with the law". Toader also accused Lazar of "bias" in certain cases.

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Social (2)

Price of natural gas to increase 5.83% today

August 1 was the date set approximately two weeks ago for the 5.83% increase in the price paid by household consumers for natural gas, according to the decision adopted by the Regulatory Committee of the National Energy Regulatory Authority (ANRE). The new increase will push up the average heating bill of a flat by RON 5 in summer and RON 10 in winter.

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Unemployment rate down in June

The unemployment rate fell to 4.5% in June, compared to 4.6% in the previous month, according to data released by the National Statistics Institute (INS). The total number of unemployed individuals was 403,921 in June, down 51,395 on an annual basis.

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