Daily Newsletter - 11 June 2019


Macroeconomic News (3)

Trade deficit soared

The trade deficit increased by 34.7% (EUR 1.298 billion) in the first four months of this year, compared to the corresponding period of 2018, according to data released by the National Statistics Institute (INS) on Monday. The effect of government stimulus on consumption was to increase in imports at more than double the exports rate: imports (CIF) amounted to EUR 28.1 billion (+ 8.3% year-on-year), while exports (FOB) amounted to EUR 23.066 billion (+ 3.8%).


MFP borrowed RON 990.1 million

The Ministry of Finance (MFP) borrowed RON 990.1 million from the commercial banks yesterday, through an issue of benchmark bonds with a residual maturity of 60 months and an average yield of 4.29% per year, according to data provided by the National Bank of Romania (BNR). The nominal value of the issue yesterday was RON 600 million, while the banks subscribed over RON 1.682 billion. MFP scheduled for this month loans worth a total of RON 4.425 billion.


FMCG market up 10.4% in Q1

Romania reported a 10.4% growth rate for the consumer goods market in the first quarter of this year, while the European market posted a 2.4% increase in value, according to an analysis by Nielsen. "Following a sharp economic slowdown in many European countries in the second half of 2018, macroeconomic indicators show an increase in eurozone GDP of 1.2% in the first quarter of 2019. However, sales fell (-0.5%) in the reference period, following the trend that started in the fourth quarter of the previous year (-0.3%)," the report said.


Financial News (3)

Andrei Radulescu, Banca Transilvania: "We expect a trend change for the trade deficit"

The tendency of the total imports of goods and services to grow faster than exports will continue in the medium term because structural reforms are being delayed, according to Andrei Rădulescu, Director of Macroeconomic Analysis at Banca Transilvania. "For 2019-2021, total exports and imports could increase with average annual dynamics of 5.6% and 6.6%, respectively. However, in the short term, we expect trade deficit trend shift, as the real effective exchange rate worsens and the domestic economic policy is rebalanced."


CEC Bank posts RON 433 million in gross profits

CEC Bank, the only top 10 bank still owned by the state, reported nearly RON 433 million in gross profits for 2018, representing the best financial performance in the past 11 years. The corporate loan portfolio grew 13.1% in 2018, compared to an average growth rate of only 6.8% for the banking system. The retail loan portfolio jumped 7.3%.


Romanians like fixed rate loans

The number of new, fixed rate loans increased to 25% of all mortgages and came close to 80% of all consumer loans at the end of Q1, 2019, according to the National Bank of Romania (BNR). Starting with the second half of 2017, Romanians focused on fixed rate loans at the expense of adjustable rate loans.


Investment News (1)

Ford Motor Company Fund and Educol to support social entrepreneurship programs

Ford Romania announced six new social entrepreneurship programs, which will be funded by the Ford Motor Company Fund - the philanthropic arm of the company. The projects are being implemented by the newly launched Ford Resource and Commitment Center in Craiova (CRAF), which was inaugurated in October last year. Designed to help create new jobs and improve the economic potential and living standards of the inhabitants of Oltenia, the Center is subject to a total investment of one million dollars over four years.


Legislative News (1)

PM Dancila says Decree 114 to be amended, not repealed

Prime Minister Viorica Dancila announced on Marius Tuca Show that Decree 114 would not be repealed. However, the decree could be amended, following talks with other stakeholders.


Politics (1)

USR and PLUS discuss alliance

The National Council of the Party for Liberty, Unity and Solidarity (PLUS) mandated Dacian Ciolos to begin negotiations for a political alliance with the Save Romania Union (USR). The negotiation commission will include Dragos Tudorache, Victor Giosan, Dragos Paslaru, Tiberiu Petrescu, Oana-Maria Bogdan and Andrei Lupu.


Social (1)

Demographic decline accelerated

The population of Romania continued to decline due to demographic causes. The decline accelerated in April, when 8,560 inhabitants were lost, compared to 6,595 in the corresponding month of 2018, mainly due to the decrease in birth rates, according to the data published by the National Statistics Institute (INS) on Monday.