Daily Newsletter - 16 May 2018


Macroeconomic News (5)

GDP growth slows down

In the first quarter of this year, Romania's GDP grew 4% in real terms, compared to the corresponding period of 2018. The quarter-on-quarter growth rate was zero, a first in almost three years.


Inflation reached 5.2% in April

The annual inflation rate reached 5.2% in April, according to the National Statistics Institute (INS). Analysts expect the inflation rate to keep rising through the summer, before reversing trend. Ionut Dumitru, President of the Fiscal Council, sees 5.2% as the peak inflation rate, followed by a drop to 4.7% in September.


INS: Wholesale market turnover up 6.8%

The total turnover of the wholesale market increased by 6.8% between January and March, compared to the corresponding period of 2017, according to data released by the National Statistics Institute (INS) on Tuesday. Consumer goods led the growth index with a 12.2% increase in sales, followed by intermediation activities (9%) and non-specialized sales (8.7%).


ING and BCR revise economic growth forecast

ING Bank analysts revised their economic growth forecast for this year from 4.7% to 3.5%, following a significant slowdown of the GDP growth rate. ING expected BNR to stop increasing the key rate this year and warned that the budget deficit could exceed the 3% cap. BCR analysts issued a revised growth rate forecast of 4.1%, down from 4.7%.


Deputy PM Viorel Stefan says investment will drive economy

The 4.2% growth rate of the national economy reported for the first quarter of this year, compared to the corresponding period of 2017, is the fifth biggest in the European Union, according to Deputy PM Viorel Stefan. In response to criticism from President Iohannis, Stefan added that investment would replace consumption as the main economic drive this year.


Financial News (4)

ROBOR rate down

The three-month ROBOR rate dropped from 2.75% to 2.74% yesterday, according to BNR. The six-month rate moved up from 2.87% to 2.88%, while the nine-month rate increased to 2.91%, from 2.90%.


CEC Bank's market share up

CEC Bank posted RON 222.7 million in gross profits for 2017, the best figure in ten years, according to a press release. The bank's assets reached RON 31.65 billion, up 12% from 2016, while the market share surged to 7.42%. The main impulse came from new deposits, attracted from both banking and non-banking clients. CEC Bank is the seventh biggest bank in the country.


OTP Romania reports 18% increase in Q1 earnings

OTP Romania posted RON 22.5 million in earnings for the first quarter of this year, up 18% on an annual basis. This is the highest quarterly earnings figure reported by the Hungarian group so far in Romania. The good performance was partly the result of a favorable change in NPL provisions.


Raiffeisen Bank Romania's earnings doubled

Raiffeisen Bank Romania reported RON 212 million in earnings for the first quarter of this year, up more than twice year-on-year. The bank's total assets jumped 13% in the first quarter, driven mainly by the bank's lending business. The aggregated value of Q1 loans increased by 15% across the board.


Investment News (2)

Lidl to open new digital hub

German retailer Lidl announced that it would open in Romania its second biggest digital hub in Europe. The initial investment is estimated at almost EUR 10 million. The company has started a hiring campaign with the purpose of hiring 100 software architects, developers and consultants in order to provide e-commerce and management solutions for the group's digital platforms.


Niro Investment Group to invest EUR 60 million in Romanian tourism

Niro Investment Group, one of the biggest business groups in the country, announced that it would invest EUR 60 million on the national hotel and tourism market in the next four years. The money will be spent on the Grand Hotel du Boulevard, a Bucharest-based hotel that is scheduled for reopening at the end of 2019. The hotel will bear the Corinthia luxury brand. The group will also invest in a hospitality excellence center and a premium hotel for business travelers.


Politics (2)

PNL urges PM to resign

Deputy Lucian Bode (PNL), President of the Chamber's Transport and Infrastructure Commission, and Petru Luhan, head of PNL's special commission of EU funds and regional development, held a press conference yesterday. The two urged PM Viorica Dancila, Minister of Transport Lucian Sova and Minister of European Funds Rovana Plumb to resign over the poor absorption rate for EU funds.


President and Cabinet in foreign policy truce

The President's Office issued a press release after Tuesday's talks between President Iohannis, Prime Minister Dancila and ministers Melescanu and Birchall. The talks were held in order to "clarify certain aspects of the country's foreign policy", according to the press release. The President "has requested loyal and fair institutional cooperation, observing the current laws and the Constitution".