Daily Newsletter - 18 May 2020


Macroeconomic News (3)

Worst month for Romanian industry: 13% contraction in March

Industrial production decreased by 5.9% in the first quarter of this year, compared to the corresponding period of 2019. Manufacturing industry reported a 6.3% contraction, followed by electricity and heating, gas, hot water and air conditioning (-4.8%) and mining (-3.8%). Industrial production dropped in the manufacturing sector by 14.4% in March, the tenth consecutive month of contraction.


Real economic growth at 0.3%

The Minister of Finance, Florin Citu, said Romania had succeeded, despite criticism and apocalyptic estimates, to post a real economic growth of 0.3%, compared to the fourth quarter of 2019. Citu added that the coming months will be very difficult for the economy, but the Cabinet will take every necessary measure to address the pandemic's effects on citizens and businesses.


Quarterly GDP up 2.7%!

According to the early data published by the National Statistics Institute (INS), the national economy grew 2.7% in real terms in the first quarter of 2020, compared to the corresponding quarter of 2019. Despite the pandemic's effects on economic activity and the restrictions imposed in the second half of March, the GDP gained 0.3%, compared to the previous quarter.


Financial News (4)

Alpha Bank launches EFT-POS terminals

Alpha Bank has launched in Romania a new generation of EFT-POS terminals. The new Verifone Engage terminals use a very secure and stable platform in terms of both hardware and software; complex operations can thus be initiated in compliance with the latest PCI and EMV standards.


Consumer loans accounted for 80% of more than 126,000 payment suspension applications

More than 126,500 applications to suspend the payment of installments have been resolved by May 8, with less than a third of applicants choosing the full nine months, according to Gabriela Folcut, CEO of the Romanian BAnking Association (ARB). 80% of applications involved consumer loans taken out by retail clients.


Patria Bank lost RON 2.4 million

Patria Bank posted RON 2.4 million in losses for the first quarter of this year, similar to the corresponding period of 2019, when the negative result was RON 2.3 million. The bank sent to the Bucharest Stock Exchange (BVB) the quarterly report that mentions "the impact on the net result of the first quarter of 2020 of certain market developments and customer behaviors as a result of the Covid-19 pandemic triggered in March 2020".


Bankers borrowed RON 13.6 billion in April

While some banks had liquidity deficits, other banks had days when they ended up with excess RON, thus resorting to the one-day deposit facility offered by the BNR. The banks deposited RON 665 million lei with BNR in April and RON 901.5 million in March. In April, BNR bought RON-denominated government securities on the secondary market worth RON 1.88 billion. Some banks ran out of RON in the first months of spring, resorting both to loans from the central bank through repo operations, and to emergency loans through the Lombard facility.


Investment News (2)

Hidroelectrica to invest RON 26 billion in new power plant, wind farms at sea

Hidroelectrica wants to invest RON 26 billion until 2025 in the refurbishment of existing hydro-power plants, the construction of a new power plant and the development of new facilities on the Danube. Some of the funds will go to onshore and offshore wind farms (offshore), sun farms, biomass-based electricity production, hydrogen production by hydrolysis, as well as the development of e-mobility networks, and recharging stations for electric cars.


Romgaz to invest RON 15.69 billion by 2025

State-owned company Romgaz has planned investment projects worth RON 15.69 billion by 2025, mostly partnerships regarding offshore projects in the Black Sea. The 2020-2025 development strategy is to be approved by the General Meeting of Shareholders on June 15. Romgaz's priorities focus on continuing the geological research works through new drilling in order to discover new natural gas reserves; developing the production potential by ensuring new capacities on the existing structures; improving the performance of installations and equipment, and increasing operational safety; identifying new opportunities for growth and diversification.


Legislative News (1)

Cabinet to meet on Monday morning

Prime Minister Ludovic Orban convened a Cabinet meeting on Monday morning in order to adopt an order implementing the state of alert bill (Law 55) passed by Parliament on Thursday, which comes into force today. The prime minister described the three-day period (Friday-Sunday) when, as a result of a CCR decision, the state could not fine those who did not comply with the state of alert, as a period during which the authorities informed the citizens about their responsibilities and duties.


Politics (1)

PSD wants Minister of Health to resign

PSD has called for the resignation of the Minister of Health, Nelu Tătaru, whom the party accused of lying regarding the allocation of medical staff bonuses. PSD spokesman Lucian Romascanu said during a press conference that doctors and other medical staff had been promised a bonus of RON 2,500 because they are at the forefront of the fight against COVID-19, but they were "scammed" by the authorities.


Social (1)

Rules for preventing office contamination

The Ministry of Labor and the Ministry of Health have established measures to prevent contamination with the new coronavirus at work during the alert period, as well as the Guidelines to a Safe Return to Work for Employees and Employers. Employers must provide special access and traffic lanes and limit access to common areas.