News

Daily Newsletter - 10 June 2019

Summary

Macroeconomic News (4)

Budget deficit outside EU practice

Romania reported the largest 2018 budget deficit of all EU states, with the not very relevant exception of Cyprus (-4.8% of GDP last year, after +0.3% in 2016 and +1.8 % in 2017), according to data published by Eurostat. The deficit was close to the macroeconomic stability limit, despite robust economic growth in recent years.

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Eugen Teodorovici: "It's essential to push forward with reforms"

The economic measures adopted by the Cabinet continued to be the main driver of economic growth. These measures nearly doubled the growth rate of the people's purchasing power, increasing it to 12.4%, said Minister of Finance Eugen Teodorovici.

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IMF urges Cabinet to change economic course

The government's policy has raised the population's income to levels comparable to advanced European economies. But the cost of higher incomes are rising inflation and widening the fiscal and current account deficits, according to a report from an International Monetary Fund mission to Romania. The solution to these imbalances is to shift the policy from salaries and pensions to infrastructure investment. The IMF also stressed the idea that the first line of defense against inflation is the independence of the National Bank of Romania (BNR).

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Investment up 5.7% in Q1

Net investment in the Romanian economy increased by 5.7% in the first quarter, compared to the corresponding period last year, to RON 17.3 billion (EUR 3.66 billion), according to data submitted on Friday by the National Statistics Institute (INS). Net investment in machinery (including means of transport) decreased by 9.8%. The largest investment, RON 8.02 billion, came from new construction works, followed by investments in machinery (RON 5.9 billion).

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Financial News (2)

Credit Agricole to spend EUR 15 billion on digitization

French banking group Credit Agricole, which operates on the Romanian market, will invest EUR 15 billion in new technologies by 2022, part of its digital transformation plan. The tech budget is included in the 2022 mid-term business plan, which also features updated profit targets after the better than expected results of the first quarter.

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Mihaela Batu promoted to CEO of ING Bank Romania

Mihaela Batu was promoted to CEO of ING Bank Romania, beginning with July 3. Batu has been the bank's deputy CEO for the past ten years. She is replacing Michal Szczurek, who is ING's next head of retail operations in Asia.

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Investment News (2)

FDI plunge

The number of foreign direct investment projects (FDI) reported by Romania fell more than threefold compared to Europe (13% vs. 4%) in 2018, year-on-year. Just 109 out of the total of 6,356 of last year's FDI projects targeted Romania, a drop of 13% compared to 2017 and the 13th place in the EU index, according to the EY European Attractiveness Survey.

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Brasov City Hall to build regional hospital

George Scripcaru, Mayor of Brasov, announced on Saturday that the city would build the biggest multipurpose hall in the country, at a cost of EUR 20 million. Another project announced by Scripcaru is a EUR 450 million regional hospital.

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Legislative News (1)

President signs teaching workload bill

President Klaus Iohannis signed on Friday the bill allowing professors with more than 25 years of experience in the education field to reduce their workload by two hours per week without a commensurate drop in pay.

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Politics (1)

USR members approve affiliation

The Political Committee of the Save Romania Union (USR), which met in Braila on Saturday, approved the party's affiliation to the ALDE+Renaissance+USR-PLUS group in the European Parliament. The group also includes Emmanuel Macron's "En Marche" party.

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