Daily Newsletter - 15 July 2020


Macroeconomic News (4)

APIA received more than 830,000 payment requests for 2020 Campaign

The campaign for receiving Single Payment Requests (CUP) for 2020 ended on July 10. The Agriculture Payments and Intervention Agency has received 830,898 payment requests for more than 9.8 million hectares of farmland.


Foreign debt up EUR 5.02 billion in five months

Between January and May, 2020, the total foreign debt increased by EUR 5.02 billion. The long-term foreign debt amounted to EUR 77.63 billion on May 31, 2020 (70% of total external debt), up 5.4% compared to December 31, 2019; the short-term foreign external debt was EUR 33.266 billion (30% of the total foreign debt) on May 31, 2020, up 3.2% compared to December 31, 2019, according to BNR data.


New manufacturing orders down 32.7% in May

The total value of manufacturing orders (domestic and foreign market) increased by 19.1%, in nominal terms, compared to the previous month, while falling by 32.7% compared to the corresponding month of the previous year. Between January 1 and May 31, 2020, new manufacturing orders fell 14.9% in nominal terms, year-on-year, according to the National Statistics Institute (INS).


Romanian industrial production down

Romania posted for May the third biggest annual reduction of industrial production, according to Eurostat. Production dropped 27.4%, compared to the corresponding month of 2019, behind only Slovakia (-33.5%) and Hungary (-27.46).


Financial News (3)

MFP launches new retail bonds

BT Capital Partners, Banca Transilvania, BCR, and BRD will begin selling to the population new issues of state bonds denominated in both the national currency and euros, which will be automatically listed on the Bucharest Stock Exchange (BVB). The issues will mature in 2 and 4 years, for RON-denominated bonds, and 5 years, for EUR-denominated bonds.


Oprescu (ARB): 22% of loans are postponed

The installment payments of approximately 22% of loans have been postponed using the moratorium offered by the government, according to Sergiu Oprescu, President of the Romanian Banking Association (ARB). Oprescu added that banks must be proactive in these times and work closely with clients to prevent certain problems from occurring.


Long-term interest rate below 4%

Romania long-term interest rate fell by almost 1 percentage point in just two months, according to data released by Eurostat. After rising to 4.83% in April, 2020, it fell below the 4% threshold at the end of June (3.89%). Beyond the obvious effects on future debt payments, this indicator is critical for convergence purposes and the country's eurozone accession.


Investment News (1)

EUR 1 billion for smart gas networks

The CAbinet has drafted a decree approving the "National Program for Connecting the Household and Non-household Consumers to Smart Natural Gas Distribution Networks". The program will allow city halls to access EUR 1 billion in EU grants for establishing and expanding smart gas distribution networks or for turning existing networks into smart ones.


Legislative News (1)

CCR rules against salary bill

The Constitutional Court of Romania issued an unanimous ruling yesterday declaring unconstitutional the law establishing a hierarchy of salaries in economic sectors that lacked collective bargains. The law had been drafted and promoted by the Social Democratic Party (PSD).


Politics (2)

President urges PSD to support quarantine bill

On Tuesday, President Klaus Iohannis urged the Social Democratic Party (PSD) to stop delaying the parliamentary debates on the quarantine and isolation bill. "Otherwise, you will be responsible for the deaths of dozens, maybe hundreds, of Romanians," said President Iohannis.


Marcel Ciolacu: We will not give in to blackmail

Marcel Ciolacu, interim leader of the Social Democratic Party (PSD), replied to the president's accusations by saying that the PSD would not give in to blackmail and would not allow the citizens' rights and liberties to be infringed on.


Social (2)

Nelu Tataru: Let's not think of restrictions, nor of relaxation

The Minister of Health stated that the state of alert must be extended and that he had prepared a report to this effect for the prime minister and the president. July 15 will bring no new restrictions, but nor will it bring any relaxation measures.


Government buys 250,000 tablets for students

The government seems to be preparing for a scenario where schools will not open in September due to the coronavirus pandemic, and is buying 250,000 tablets to facilitate remote teaching activities. The estimated value of the procurement contract posted in SEAP on Tuesday is RON 126 million (about EUR 100 per tablet).