Daily Newsletter - 10 June 2020


Macroeconomic News (4)

World Bank expects Romanian economy to contract 5.7% in 2020

The World Bank has significantly reduced its forecast for the world economy. The organization expects the Romanian economy to contract of 5.7% in 2020, followed by an increase of 5.4% in 2021, according to the June edition of the Global Economic Prospects report. The European Commission forecast a 6% drop, followed by a 4.2% expansion in 2021.


Trade deficit up 19%

Romania's trade deficit gained almost RON 974 billion in the first four months of this year, rising to a total of RON 6.089 billion, according to data released by the National Statistics Institute (INS) on Tuesday. FOB exports amounted to EUR 19.99 billion, down 13.3% year-on-year, while CIF imports reached EUR 26.08 billion, down 7.4% year-on-year.


Timber industry to receive EUR 200 million in EU funds

The Minister of Environment, Water and Forests, Costel Alexe, announced on Tuesday that small forestry companies will receive around EUR 200 million in financial support. The funds will be distributed in grants worth EUR 200,000 each. "In the current budget, the forestry sector was allocated insufficient funds. We want to change that," said Minister Costel Alexe.


GDP up 2.7% in Q1

Romania's Gross Domestic Product was RON 272.4 billion for the first quarter of this year, in seasonally adjusted data based on current prices, up 0.3% in real terms from the fourth quarter of 2019, according to the National Statistics Institute (INS). The annualized growth rate is 2.7%.


Financial News (4)

BNR bought state bonds worth RON 1.6 billion in May

The National Bank of Romania (BNR) bought government securities worth RON 1.6 billion from the secondary market in May, down 14.4% from the previous month. BNR's total bond portfolio has thus risen to about RON 3.5 billion, according to the latest data. The acquisition of government securities from the secondary market added liquidity to the banking system, with BNR being a net creditor.


CEC Bank offers 1,000 free holiday packages to medical personnel

On Tuesday, CEC Bank offered 1,000 free holiday packages to the doctors and medical staff working at the hospitals that made the biggest efforts to contain fight the coronavirus. Staff members can use the bank's website to claim their free holidays.


Banks made RON 4.9 billion in loan interest in Q1, 2020

The banks' revenues from loan interest reached RON 4.9 billion in Q1, 2020, up 7.9% on an annual basis. Meanwhile, the interest paid to depositors amounted to only RON 957 billion, five times lower. The banking system's operating earnings stood at RON 2.2 billion. The second quarter could bring a drop in earnings because of the pandemic's effects.


UniCredit Bank finances social enterprises

Under the umbrella of the Social Impact Banking program, UniCredit Bank Romania is currently working with businesses in the social field and, at the same time, with groups of customers who face difficulties in accessing traditional financing services. In addition to providing loans to projects and organizations that are generally excluded from banking products and services, Social Impact Banking gives the bank the opportunity to participate directly in supporting social projects, by encouraging its employees to volunteer for programs where they share their financial and business expertise.


Investment News (2)

GTC invests more than EUR 70,000 in its Bucharest office buildings

GTC, one of the largest office space owners in Bucharest, has allocated more than EUR 70,000 for complying with the measures ordered by the authorities to prevent the spread of the new coronavirus at the company's five office buildings. The tenants may reconfigure their office space in order to ensure the minimal social distancing.


Bucharest new residential property yield

The return on investment in new residential properties in Bucharest varies between 5% and 7%, with the best figures being reported for apartments that are further from the city center, in more crowded neighborhoods, such as Dristor-Vitan, Berceni, Rahova or Crangași. In these neighborhoods, the rent to purchase price ratio is the best, which ensures an attractive return on investment.


Politics (2)

Parliament prepares to reject president's request

Shortly after President Iohannis asked the Parliament to approve an extension of the state of alert after June 15, the Social Democratic Party (PSD) and the Democratic Union of Romanian Magyars (UDMR) announced they would not do so. The Save Romania Union (USR) is still undecided, with Dan Barna announcing that the decision would depend on the information that the Cabinet will use to make its case.


Victor Ponta: I'm thinking of running for president in 2024

Victor Ponta, leader of the Pro Romania party, stated on Tuesday that he was thinking of running for president in 2024, especially since it's a special year, with four elections: presidential, parliament, European parliament, and local.


Social (1)

COVID testing begins in Bucharest

The population testing program will begin at the National Arena on Wedensday, according to an official announcement from the Bucharest City Hall. The program is supposed to establish the population's immunization rate for the new coronavirus.