News

Daily Newsletter - 16 November 2020

Summary

FIC (1)

"In fata ta" - November 15 Guest: Ramona Jurubita, FIC President

Ramona Jurubita, Country Manager KPMG Romania and President of the Foreign Investors Council (FIC), and Victor Iancu, a director with KPMG, were the guests of the "In fata ta" show on November 15. The main topics will be the private sector situation and foreign investment in Romania in the current context. According to Ms. Jurubita, investment is currently falling, with Romania reporting the lowest percentage of value-added investment in the region. FIC will launch soon a report on foreign investment in Romania. (For quick connection to the key message you may go directly to the min 47:50 for 2 minutes.)

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Macroeconomic News (3)

ING slashes 2020 growth forecast

ING Bank expects the national economy to grow 4.1% in 2020, down from the previous estimate of 5.2%. The adjustment was prompted by lower than expect figures for the third quarter of the year, as well as the threats to foreign demand posed by the COVID-19 pandemic. The economy grew 5.6% in the third quarter, below the analysts' estimates of a 7.2% expansion.

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Q3 growth rate highest in 20 years

Romania had in the third quarter of 2020 the highest quarterly economic growth in the last 20 years and the fastest economic recovery, said Finance Minister Florin Citu at a press conference held on Saturday. "Other crises lasted a few quarters, lasted even a few years. This is our starting point: the highest quarterly economic growth in the last 20 years and the fastest recovery of the economy," noted Citu.

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Turnover from market services provided to retail clients down

The turnover from market services provided to retail clients dropped 33.7% (adjusted) in the first nine months of this year, compared to the corresponding period of 2019, according to the National Statistics Institute (INS).

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Financial News (4)

Bichi (BNR): Implementation of new AER bill very unclear

The implementation of the Annual Effective Rate law is very unclear and will lead to numerous lawsuits, according to an article by Cristian Bichi, adviser to the BNR governor. Bichi noted that the bill features an erroneous definition of the annual effective rate, it references caps that are not included in the text, and it includes stipulations that contradict other national and EU regulations.

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BT posts RON 901.4 million in Q1-Q3 earnings

Banca Transilvania logged RON 901.49 million in earnings for the first nine months of 2020, while the entire BT group, with all its subsidiaries, reported earnings worth RON 1.05 billion. Banca Transilvania Financial Group's assets reached RON 100.4 billion at the end of the third quarter, loans increased to RON 41.9 billion, including loans from financial leasing contracts, while customer deposits reached RON 83.9 billion.

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Raiffeisen Bank earnings up 9%

Raiffeisen Bank reported RON 583 million in earnings for the first nine months of this year, up 9% on an annual basis. The bank's assets reached RON 49.61 billion, up 17% on an annual basis, despite the deterioration of the macroeconomic situation.

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Current account deficit close to 2019 level

The current account of the payment balance showed a deficit of EUR 7.7 billion at the end of September, down 2.6% compared to the corresponding month of 2019. The 9.5% increase in the goods deficit was partly compensated by a 6.4% increase in the services surplus. The overall result was a 13% expansion of the foreign deficit.

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Investment News (2)

Ministry of Development to allocate EUR 700 million for industrial parks

The Minister of Development announced on Saturday that the government would provide around EUR 700 million for the establishment of new industrial parks under the National Recovery and Resilience Program (PNRR). "Our desire and our goal is to build several industrial parks in Vrancea County. Vrancea County and Moldova will benefit in the coming years from additional infrastructure, both railways and roads. According to our analysis, at the end of 2024, the A7 Moldova Highway will be open to the public, at the very least from Ploiesti to Bacau," said Minister Stefan.

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Plans for new subway system

The Ministry of Transport launched for public debate the project for building a metropolitan rail system and a subway system in Cluj-Napoca. The project is estimated at RON 5.66 billion, including VAT, and will be financed from the Major Infrastructure Operational Program.

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Legislative News (2)

President signs bill setting VAT at 5% for houses under 120 sqm

President Klaus Iohannis signed on Friday the bill lowering the VAT rate to 5% for houses with usable areas of no more than 120 square meters.

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Bicycle parking mandatory for all public buildings

President Klaus Iohannis signed the bill making it mandatory for all public buildings and public utility buildings to have metal structures that allow the parking of at least 10 bicycles. Failure to comply will be fined up to RON 4,000.

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Politics (2)

PSD suspends campaign

Marcel Ciolacu, leader of the Social Democratic Party (PSD), announced the suspension of all campaign events out of respect for the Piatra Neamt tragedy, noting that all political decision-makers must focus exclusively on public health at this time.

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PNL postpones platform launching

Ludovic Orban announced that the launching of the National Liberal Party's (PNL) platform would no longer be held on Monday. The party leader urged all colleagues to suspend their campaign events out of respect for the victims of the Piatra Neamt County Hospital fire and their families.

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