Daily Newsletter - 15 January 2019


FIC (1)

Ramona Jurubita, KPMG, Board member FIC: Think very carefully before you act

There are so many real problems to address in Romanian society that it's incomprehensible why we are wasting our time with false solutions to imaginary problems. We have been seeing the return of a discourse that is extremely dangerous to us, every citizen of this country: the propaganda-based push for an antithesis between Romanians and foreigners, Romanian companies and foreign capital companies, Romanian investments and foreign investments.


Macroeconomic News (4)

Industry turnovers grew slower in November

The turnover of industrial companies increased by 9.3% in November, 2018, compared to the corresponding month of the previous year, growing slower compared to the previous month, according to data released by the National Statistics Institute (INS) on Monday. In October, 2018, industry turnovers rose 12.9% compared to the corresponding month of the previous year.


Current account deficit breaks through 4% of GDP threshold

The current account of the balance of payments showed a deficit of EUR 8.73 billion for the first eleven months of 2018, about 60% higher compared to the corresponding period of the previous year. The deficit is already at 4.28% of the GDP (which was estimated at EUR 204.06 billion in the autumn forecast). The current account deficit estimate was revised upwards last autumn (rather optimistically) by the National Strategy and Forecast Commission (CNSP), from 3.1% of GDP to 3.5% of GDP.


Foreign investment passed EUR 4.8 billion last year

Data released by the National Bank of Romania (BNR) indicated that the country was the recipient of more than EUR 4.8 billion in foreign investment during the first 11 months of last year, up 8.5% compared to the corresponding period of 2017. Equity investment (including reinvested net profits) was EUR 3.77 billion, while intragroup loans amounted to EUR 1.07 billion.


BNR reports increase in foreign debt

The National Bank of Romania (BNR) announced that the country's total foreign debt increased by EUR 2 billion between January and November 2018, to EUR 99.3 billion, of which the short-term debt accounted for EUR 31.6 billion at the end of November, up 9.7% from December 31, 2017.


Financial News (3)

ANAF inspects banks

The National Fiscal Administration Agency (ANAF) started a series of inspections at lenders last week, according to market sources. The tax inspectors want to assess the value of the banks' financial assets, which will be subject to the new the "greed tax". The tax was the result of a market situation that the government saw as dominated by high interest rates. The same sources added that the local banks have already moved abroad their biggest loans.


NPL rate falls below 5%

The National Bank of Romania (BNR) announced that the rate of non-performing loans in the banking system went below 5% at the end of November last year. For comparison, the NPL rate was 7% in November, 2017. The rate peaked in 2014, when nearly a quarter of loans went into the unrecoverable category, and the cleansing of balance sheets was a priority for all bankers.


Banca Transilvania shares plunge 7% because of new tax

The Bucharest Stock Exchange (BVB) started the week on a sour note. Major trades were precipitated by investors' reactions to the news that the tax on bank assets will be calculated and paid quarterly. This means that the tax would be 4 times higher than if the figures originally communicated were based on annualized benchmarks.


Investment News (1)

EUR 266 million invested in rural development

Almost EUR 266 million from the European Regional Development Fund (ERDF) will be spent to extend the area included in the national land registry, the land registration system in rural Romania. The purpose of this project is to improve the legal framework and the transparency of property rights, according to a press release published today by the European Commission.


Politics (2)

President Iohannis rejects nominations again

President Iohannis announced last evening that he would reject for the second time the nominations of Olguta Vasilescu and Mircea Draghici for the positions of development and transport ministers. The President advised the Cabinet to read carefully the explanation for his initial rejection.


Vasilescu says Cabinet would take president's rejection to CCR

President Iohannis is in violation of the legislation and of CCR rulings, according to Olguta Vasilescu. The government would refer to the Constitutional Court the president's decision to reject again the nominations of Vasilescu and Draghici.


Social (1)

Demographic decline slowed down in November

Romania's population continued to decline due to demographic causes, but the decline slowed down in November 2018, when the number of inhabitants dropped by 6,759, compared to 7,369 in the corresponding month of 2017, thanks to the increase in birth rates, according to data released Monday by the National Statistics Institute (INS).