Daily Newsletter - 19 November 2020


Macroeconomic News (4)

Romania's macroeconomic vulnerabilities worsened by crisis

Romania has entered the Covid-19 crisis with vulnerabilities related to its foreign and public debt, cost competitiveness and an unpredictable business environment, vulnerabilities that have continued to worsened, according to the European Commission. The EU executive noted that debt rates have risen significantly and the country's external position has deteriorated.


Economy to recover in 2021

The National Strategy and Forecast Commission (CNSP) expects the national economy to recover in 2021, with a 4.5% expansion of the Gross Domestic Product, compared to a 4.2% contraction this year. The projections for the main macroeconomic indicators point toward a 4.3% increase in consumption next year, along with a 2.5% inflation rate and an average exchange rate of RON 4.9 per EUR.


Budget deficit to reach 9.1% this year, 7% in 2021

The Ministry of Finance is taking into account a deficit of 9.1% of GDP for 2020, along with an economic contraction of 4.2%, said Finance Minister Florin Citu on Wednesday. The minister added that the estimated budget deficit increased by RON 5 billion compared to the previous forecast, mainly due to a drop in revenues.


5,100 micro-grant applications validated

Economy Minister Virgil Popescu announced that 5,100 micro-grant applications have been validated. He added that "for the working capital scheme, the evaluation will start on Monday and I estimate that, by the end of this month, the companies' accounts will receive the requested funds".


Financial News (4)

Growth of corporate borrowing accelerated in September

The volume of new corporate loans denominated in the national currency approached RON 3.5 billion in September, the highest monthly figure of this year and 48.3% higher compared to September, 2019. After the first nine months of 2020, RON-denominated corporate loans reached RON 22.6 billion, up 7.2% year-on-year. However, corporate loans denominated in foreign currencies are down approximately 24% compared to 2019.


Third quarter indicates mortgage demand recovery

One of the most important measures taken by ING Bank to support the Romanian business environment was to join in the SME Invest program. As a result of the high volume of approved loans, ING requested and obtained in August the tripling of its initial budget. Since the beginning of the program, the bank has received over 7,000 applications. At the end of the third quarter, over 1,000 applications worth a combined RON 700 million were approved and made available to clients, while more than 3,000 applications were in various stages of the approval process.


ING Bank Romania's earnings down 26%

ING Bank Romania's earnings fell by 26% in the first nine months of this year, down to RON 443 million, while total revenues increased by 2% to RON 1.57 billion. In the context of the COVID-19 pandemic, anticipating the effects of the crisis generated by this event, provisioning expenses doubled compared to the corresponding period of last year, reaching a total of RON 326 million.


Raiffeisen Bank wins private banking award

Raiffeisen Bank Romania won for the second consecutive year the award for the best provider of private banking services in Romania, awarded by Professional Wealth Management magazine. The award was won thanks to the Friedrich Wilhelm Raiffeisen (FWR) service.


Investment News (1)

OMV Petrom invested EUR 21 million in biocomponent fuel production

OMV Petrom has invested approximately EUR 21 million to increase its production capacity for biocomponent fuels at the Petrobrazi refinery. The current regulations require gasoline to contain biocomponents amounting to at least 6.5%, while diesel must contain at least 8% biodiesel.


Legislative News (1)

CCR says bill affecting small fuel traders unconstitutional

The Constitutional Court admitted on Wednesday the complaint filed by USR, PNL, PMP, PSD and independent deputies regarding the bill amending the Tax Code in order to close the fuel distribution market to companies that lack their own storage space. The bill was declared unconstitutional and sent back to Parliament.


Politics (2)

Marcel Ciolacu: "I think Iohannis believes he's the opposition leader"

Marcel Ciolacu, leader of the Social Democratic Party (PSD), called President Iohannis a "typical politician", who is also "coddling" Prime Minister Ludovic Orban. Ciolacu also blamed the National Liberals (PNL) for the state of the healthcare system.


PNL to launch "We're Developing Romania" platform

The National Liberal Party (PNL) will unveil today the "We're Developing Romania" platform, featuring the liberal vision and top priorities for the next four years. The event will be attended by more than 400 guests through the online platforms.


Social (1)

State support for shows, festivals, bookstores and publishing houses

The Cabinet will discuss a memorandum for establishing a state aid scheme to support cultural activities. The state aid will be distributed to the organizers of cultural events and music festivals, bookstores and publishing houses. The estimated budget for this scheme is around EUR 100 million.