Daily Newsletter - 11 January 2018


Macroeconomic News (4)

Local wholesale electricity prices up 

Romania's wholesale price of electricity showed the highest growth rate in the third quarter of 2017, surging 52% to become the highest prices in the region, according to a report released by the European Commission. The report noted that Slovenia and Hungary reported a 41% increase in prices each. Greece and Portugal have the highest electricity prices in the EU.


Trade deficit grows 

"Last year's trade deficit will probably be EUR 12 billion, the worst in Romania's history," said Mihai Ionescu, president of the National Association of Exporters and Importers (ANEIR). The National Statistics Institute (INS) posted a EUR 11.34 billion trade deficit for November, up EUR 2.57 billion on an annual basis.


Romanian households saw 2.9% increase in revenues in Q3, 2017 

The total revenues of Romanian households jumped 2.9% in the third quarter of last year, compared to the previous quarter, reaching RON 3,426 per month. At the same time, expenses moved up 3.1% to RON 2,885, according to data published on Wednesday by the National Statistics Institute (INS). The average household income was RON 3,329.


World Bank upgrades Romania's outlook 

The World Bank expects the Romanian economy to grow 4.5% this year, according to the Global Economic Prospects report. The forecast for 2019 and 2020 is 4.1% and 3.5%, respectively.


Financial News (4)

OTP added RON 125 million to Romanian subsidiary's equity 

Hungarian group OTP has added RON 125 million to the equity of its Romanian subsidiary, pushing the total close to RON 1.38 billion. The decision may have been prompted by last year's deal with National Bank of Greece to buy Banca Romaneasca. The deal was approved by the Competition Council, but the process of merging the two banks is stalled because the National Bank of Romania (BNR) is still analyzing the situation.


Trade balance puts pressure on exchange rates 

The average RON/EUR exchange rate surged in 2017 by the highest margin in five years, while the exchange rate posted at the end of the year was the worst in eight years, according to official data. While the local fluctuations are relatively small compared to the international markets, the national economy cannot cope with major fluctuations and both investors and citizens expect a higher degree of stability.


Prima Casa guarantee budget set at RON 2 billion 

The Cabinet approved at yesterday's meeting a RON 2 billion guarantee budget for this year's Prima Casa program. The maximum interest margin was reduced from 2.5% to 2% in order to bring the total costs of all financing categories at the same level, eliminate the revolving component and clarify the principles guiding the reallocation of unused guarantees.


OTP Bank won a class lawsuit 

OTP Bank announced that it had won a class lawsuit before the Bucharest Court of Appeals on December 19. The lawsuit had been brought by more than 100 clients, represented by the Parakletos Association, in order to have their CHF-denominated loans converted at the original exchange rate. More than 73% of OTP's clients have accepted so far the solution offered by the bank.


Investment News (1)

Forte Partners to develop massive real estate project 

Real estate developer Forte Partners, a company founded by three Romanian businessmen, will build a mixed project on Serban Voda Road, close to the Unirii Square. The project will feature buildings with 4, 5, 6 and 8 floors. At the end of last year, Forte Partners inaugurated the first building of the business park called The Bridge, which was leased to BCR and IBM.


Legislative News (1)

Cabinet rejects Royal House bill 

The Cabinet decided at Wednesday's meeting to report out negatively the bill drafted by PSD and ALDE leaders Dragnea and Tariceanu regarding the Royal House status. The official report was clear: "The Government does not support the passing of this bill."


Politics (2)

PM Tudose ready to accept Carmen Dan's resignation 

Prime Minister Mihai Tudose stated yesterday that Carmen Dan, the Minister of Internal Affairs, would resign "if she were allowed to". "She said on Monday that she was willing to resign. [...] Right now, I think I would accept it," said the PM.


Which PSD barons turned on Dragnea? 

Political sources say Niculae Badalau, executive president of the Social Democratic Party (PSD), had accused party leader Liviu Dragnea of having filled the ministries with his friends from Teleorman. Marian Oprisan has also criticized Dragnea, while PM Tudose and Codrin Stefanescu want Mihai Fifor, the Minister of Defense, to resign.