Daily Newsletter - 14 January 2021


Macroeconomic News (4)

Foreign debt close to EUR 120 billion

The current account of the balance of payments showed a deficit of EUR 9.7 billion for the first eleven months of the current year, up 1.1% from the corresponding period of 2019. The 7% increase in the goods deficit was partially offset by a slightly more than ten percent increase in the services surplus.


Economy expanded 5.8% in Q3

In the first 11 months of 2020, the economy contracted 5%. The INS published on Tuesday the detailed GDP figures for the third quarter of 2020 and for the first 11 months of the year. Compared to previous data, some marginal upward revisions were made, but the figures show that, all in all, things were not so bad last year.


MFP: Deficit must be reduced without endangering economic recovery

Finance Minister Alexandru Nazare held talks with European Economic Commissioner Paolo Gentiloni on Wednesday, saying Romania must reduce the deficit in such a way so as not to jeopardize the economic recovery prospects. Reform plans to support economic recovery, together with the economic outlook for the current year, financing needs and the National Recovery and Resilience Plan were also among the topics for discussion.


Industrial production down 10.2% in 11 months

Romania's industrial production decreased by 10.2% (gross series) and 10.5% (adjusted figures) in the first 11 months of last year, compared to the corresponding period of 2019, according to data from the National Statistics Institute (INS).


Financial News (3)

560,000 debtors have requested moratoriums so far

Debtors can defer the payment of installments on loans contracted before March 30, 2020. The Center for Alternative Dispute Resolution in Banking (CSALB) has issued a warning about the cost of postponing payments. Approximately 560,000 borrowers have so far benefited from government and private moratoriums, i.e. 14.7% of total loans granted by the banking sector.


GB entities providing banking services in Romania need BNR permit

As of January 1, 2021, entities based in the United Kingdom (including those authorized in Gibraltar) that provide banking, payment and electronic currency issuance services in Romania no longer benefit from the single European passport. As a result, they require permits granted by the National Bank of Romania (BNR) or by a competent authority from another EU member state.


Loan-to-deposit ratio to keep falling

The loan-to-deposit ratio will continue its downward trend in the medium term and will reach 53% at the end of 2023, according to an analysis conducted by Andrei Radulescu, director of macroeconomic analysis at Banca Transilvania. The challenges for the Romanian banking sector in the short and medium term include the possibility of an increase in the non-performing loans rate, the incorporation of the digital revolution, the consolidation process, and the growth of the investment segment, according to the analysis.


Investment News (2)

Foreign direct investment down 60.42% in November

The direct investment made by non-residents in Romania amounted to EUR 1.8 billion (compared to EUR 4.7 billion euros between January and November of 2019), of which equity investments (including estimated net reinvested profit) amounted to a net value of EUR 3.845 billion, while intragroup loans reached a negative net value of EUR 1.9 billion.


Nuclearelectrica to receive USD 1.3 million grant from US-TDA

Nuclearelectrica informed the Bucharest Stock Exchange (BVB) on Wednesday that it will receive a USD 1.3 million grant from the US-TDA to finance the cost of technical assistance services related to the identification and preliminary assessment of some potential nuclear sites compatible with SMR technologies in Romania.


Legislative News (2)

Failure to protect vulnerable energy consumers to result in fines

Mayors, social assistance workers, and energy suppliers could be fined up to RON 5,000 for non-compliance with the provisions of the law protecting vulnerable energy consumers, according to the bill discussed at Wednesday's Cabinet meeting. Mayors could be fined RON 1,000 to 5,000 if they fail to establish the right to assistance based on the consumers' real situation.


CCR rules pension increase law constitutional

The Constitutional Court of Romania (CCR) rejected on Wednesday the Cabinet's complaint regarding the law increasing the pension point by 40%, thus declaring the bill constitutional. However, the CCR ruling that opens the door to a pension increase has little chance of being implemented.


Politics (2)

US Ambassador receives Romanian medal

On Wednesday, President Klaus Iohannis signed the decree for granting the Star of Romania medal to the United States Ambassador to Bucharest, Adrian Zuckerman. According to the Presidential Administration, the medal is a sign of "high appreciation for the entire activity carried out during his term in Romania, as well as for the substantial involvement in the development and deepening of the Strategic Partnership between our country and the United States of America".


Gabriela Firea says ruling coalition will implode

Senator Gabriela Firea (PSD) said that, in her opinion, the governing coalition formed by PNL, USR-PLUS and UDMR will not last more than six months. She believes that, come spring, President Klaus Iohannis "will have to make an evaluation after the accommodation period".


Social (1)

PM requests 8 million more vaccine shots for Romania

Prime Minister Florin Citu announced that Romania has requested another 8 million doses of the BioNTech/Pfizer vaccine from the European Commission. These shots are part of the 200 million additional doses negotiated at the European level.