News

Daily Newsletter - 15 October 2020

Summary

Macroeconomic News (5)

Economic recovery slowed down

The pace of economic recovery has slowed in recent months, BCR analysts said in a new report. They point out that economic activity stood at 68% of the average of a normal pre-Covid-19 month in September, a slight improvement from 63% in August. In April, at the height of the health and economic crisis, the economy functioned at only 27% of capacity.

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Current account deficit falls for fifth consecutive month

The current account deficit decreased by 18% compared to the first eight months of 2019, falling to EUR 5.79 billion amid growing exports of services and better revenue balance figures. Foreign investment increased very slightly compared to July and remained well below last year's figures. The goods balance continued to spoil the picture, rising EUR 851 million year-on-year to a total of EUR 11.82 billion.

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IT was start of national economy in H1, 2020

The IT industry, which accounts for 7-8% of the GDP, reported a 12.4% growth rate for the first half of 2020, by comparison with the corresponding period of 2019. IT and construction are the only industries that continued to grow during the pandemic.

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Agriculture Ministry to start paying subsidies tomorrow

The Minister of Agriculture, Adrian Oros, said the ministry will begin making early payments on account of direct subsidies and rural development programs. "We have EUR 1.94 billion from the ministry's budget. There are 826,964 beneficiaries, totaling 9.81 million hectares," noted the minister.

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Industry shows signs of recovery

Romania reported a 10.5% contraction of industrial production for August, compared to the previous month. The annualized trend is a 4.3% decrease, according to the National Statistics Institute (INS). The energy sector dropped only 1.9% in August and seems to be on track for a quick recovery.

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Financial News (4)

BCR requires clients to make appointments

BCR announced it would not allow clients to enter its branch offices unless they make appointments by phone in advance. The measure is temporary and designed to protect the health of employees and clients, as well as to reduce the waiting times. The new system has been tested in 12 branch offices over the past few months.

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Foreign investment down 68%

Foreign direct investment amounted to EUR 1.39 billion in the first eight months of 2020, down 68% compared to the corresponding period of 2019, according to figures released by the National Bank of Romania (BNR) yesterday. Equity investment accounted for EUR 994 million, while intra-group loans reached EUR 402 million.

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Patria Bank appoints new CEO

Patria Bank announced on Wednesday evening the appointment of Burak Yildiran, former deputy CEO of Garanti BBVA Romania and former CEO of TotalSoft, to the position of CEO. Yildiran is replacing Daniela Iliescu, who has been head of Patria Bank since July, 2019. Iliescu will become the bank's deputy CEO.

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Consumer borrowing recovered in summer, despite high interest rates

The value of new RON-denominated consumer loans reached almost RON 1.76 billion in August, down 15.4% compared to the corresponding month of 2019. The annualized trend for the first eight months of the year was a 19.6% contraction. The average interest rate for new consumer loans was 9.78%.

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Investment News (1)

Delgaz Grid working on five projects

Delgaz Grid, the distribution company belonging to German group E.ON, announced on Wednesday that it is working on five projects worth over RON 260 million. The projects focus on digitization and automation of the company's distribution network and are in various stages of the process for securing EU grants.

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Legislative News (1)

Tourism buildings and land tax cut amended

The Parliament adopted a bill stipulating that the 50% reduction of the tax on buildings and land used to provide tourism services will be applied to assets used for no more than 180 days, instead of "seasonally", as the law currently stipulates.

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Politics (2)

President Iohannis receives Emperor Otto Prize

President Klaus Iohannis was in Magdeburg, Germany, yesterday to receive the Emperor Otto Prize for his involvement "in the European unification process". The president said the award is "a reconfirmation of my country's lasting belief in a Europe that's united in peace and democracy".

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Ponta: The elections should be postponed for health reasons

Victor Ponta, leader of Pro Romania, called yesterday to have the parliament election postponed until "the health situation is brought under control" and proposed that the current MPs should no longer be paid after the end of their terms.

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Social (1)

Minimum service package for rural children

Rural children will benefit from a Minimum Package of basic healthcare, education and social protection services, following the Parliament's passing of an amendment to the Social Assistance Law. Pieter Bult, UNICEF's representative to Romania, said the pandemic has confirmed that children and their families need help.

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