News

Daily Newsletter - 12 April 2019

Summary

FIC (1)

Foreign investors in Romania are expecting lower incomes and investments shows FIC study

The most recent results of the Foreign Investors Council’s (FIC) Business Sentiment Index raise some important worries and leave open a big question mark which can be answered with the next survey in the second half of 2019. Fully 85% of respondents say the business environment in Romania has worsened, the highest number on record yet. By looking at these results FIC believes there is a need to sound an early warning that clouds may be gathering on the horizon and the complete lack of predictability FIC has seen in past years is starting to take its toll. Although FIC does not know yet how persistent the decline of sentiment among the investors is, FIC believes the window for easy reforms and fiscal stimulus is closing. If Romania is to keep growing at the current rate, there needs to be a serious change in the legislative process and comprehensive dialogue with the business environment is needed. Important legislation must not be passed without dialogue and impact assessments, infrastructure needs to be built, the administration digitalized and reformed and businesses need to move higher up the global value chain.


Foreign investors’ expectations worsen amid regulatory changes in Romania

Clouds seem to be gathering in the economy

FIC Business Sentiment Index (March 2019) – Clouds are gathering

Survey: Most of the foreign investors say the business environment in Romania has worsened

Foreign investors in Romania issue warning

FIC: Most foreign investors see worsening business environment

FIC: "The Romanian business environment has worsened"

FIC: "The Romanian business environment has worsened"

Most foreign investors say the Romanian business environment has worsened

Most foreign investors say the Romanian business environment has worsened



Most foreign investors say the Romanian business environment has worsened



Most foreign investors say the Romanian business environment has worsened



Record number of foreign investors expects very bad year

Foreign investors - Bad news for government

Foreign investors in Romania more skeptical about their business growth outlook

Foreign investors in Romania

Foreign investors in Romania

Dark clouds are gathering

Clouds are gathering

Clouds are gathering

Clouds are gathering

Worrying signs

FIC survey

Top

Macroeconomic News (4)

Sentenced to staglafion

A significant increase in the trade deficit was reported a few days ago, and then data on rising consumer prices, which exceeded expectations, came in. At the same time, the IMF growth forecasts have been revised downwards. The overall result of these statistics seems to indicate that Romania is heading to the stagflation trap, a phenomenon characterized by rising prices amid a stagnation or contraction of the real economy .

Top

Inflation rate reached 4%

The rise in consumer prices slowed to 0.49% in March, compared to February, but the annual inflation rate rose to 4%, as food prices jumped 4.45%, non-food prices by 4.15% and service prices by 3.18%, according to data released by the National Statistics Institute (INS) on Tuesday. In February, consumer prices rose by 0.79% compared to January and the annual inflation rate was 3.83%.

Top

Labor import into high gear

The labor shortage, which struck the construction and HoReCa sectors particularly hard, has led to an increase in the number of non-EU migrant workers arriving in Romania. The number of workers jumped from 7,000 in 2018 to 20,000 in 2019. More than 5,000 hiring permits have been granted since the beginning of this year, according to the head of the Bucharest Immigration Directorate (DpI).

Top

OTP Bank sees economic slowdown

The growth pace of the Romanian economy will fall to 3.5% this year. Dan Popovici, CEO of OTP Asset Management Romania, said he expects investment to show modest gains this year because the positive effect of EU fund absorption and pressure to improve productiveness could be partly offset by lower investment in energy, telecom and finance.

Top

Financial News (3)

BCR hikes office fees

BCR announced an increase in withdrawal fees, as well as in office and phone transaction processing fees in an attempt to shepherd clients toward the George internet banking platform. The bank is also increasing the management fee for the current accounts of clients who do not receive revenues on a regular basis. Moreover, account statements will no longer be sent by mail.

Top

Cost of interest soars

Romania paid RON 2.29 billion worth of interest on loans in the first two months of the year, up about 15% compared to the corresponding period of the previous year, and almost twice more compared to the corresponding period of 2012. Romania took out the most expensive loans in the European Union, five times more expensive than those taken by Greece.

Top

BNR Governor said Romania took major steps toward banking union accession

Mugur Isarescu, Governor of the National Bank of Romania (BNR), said the country has taken major steps toward its accession to the European banking union. The liquidity and solvency rates of the local banking system are far above the prudential thresholds, mainly because local banks were not bailed out during the financial crisis.

Top

Investment News (1)

Top 10 environment projects financed by EU in Romania

The ten largest environmental projects funded by the European Union have brought Romania nearly EUR 900 million. The projects focused on the reconstruction of beaches and the modernization of water networks and were managed by state-owned companies. The Romanian Water National Administration (ANAR), the Somes Water Company (CAS) and Water and Sewerage Galati (ACG) are among the top beneficiaries of projects funded under the previous EU budget (2007 - 2013).

Top

Legislative News (1)

Minister of Transport announces procurement decree

Transport Minister Razvan Cuc said in Arad on Thursday that he would present the Cabinet next week with a draft decree that would completely change the procurement rules because many projects have been delayed by "cunning people who go to court only for the sake of blocking projects". Cuc said projects launched by the Social Democratic Party (PSD) accumulated 311 months worth of delays in the past two years alone.

Top

Politics (2)

Cotroceni talks

President Klaus Iohannis completed on Thursday the first round of political consultations regarding the national judiciary and the usefulness of holding a referendum on this issue at the same time as the European Parliament election, on May 26. All those present - PNL, USR, UDMR, PMP and ethnic minorities - agreed to hold the referendum.

Top

PSD-ALDE coalition under pressure

Calin Popescu-Tariceanu, head of ALDE, complained that the Social Democratic Party (PSD) is still talking about a decree amending the Criminal Code, even though he had agreed with PM Dancila and PSD leader Liviu Dragnea to put an end to the discussion by March 1.

Top

Social (1)

Railroad workers to hold protest

Railroad workers, represented by the CFR unions, protested in front of the Ministry of Transport on Thursday. The workers demanded a 50% increase in salaries, which they want stipulated in the future labor contract. Labor leader Rodrigo Maxim also called for investment in rolling stock and a ban on route cancellations.

Top