Daily Newsletter - 2 April 2019


Macroeconomic News (3)

State budget is RON 5.2 billion in red

The Cabinet reported a RON 5.2 billion deficit of the consolidated state budget for the first two months of this year, the equivalent of 0.51% of the GDP. The deficit is down slightly compared to the corresponding period of 2018. Investment spending amounted to RON 1.6 billion, including defense procurement, a huge fall from the RON 3.7 billion reported for January and February of 2018.


"France and Germany have better yields per hectare because they have 100 years of capitalism"

Romania had the best maize and sunflower harvests of the European Union in 2018, but it also used a higher acreage than any other member state, according to the National Statistics Institute (INS). The yield per hectare was lower than in France and Germany, which reported the second and third highest figures.


First budget revision scheduled for July

The first revision of the state budget is scheduled for July. "The local revenue estimates could show some changes. Why? I'll give you a reason. Let's say a local community made a transaction last year. It reported a revenue. But that was a one time thing. So we need to take this into account when forecasting revenues," said the Minister of Finance, Eugen Teodorovici.


Financial News (5)

Analysts expect BNR to keep key rate at 2.5%

Economists working for the commercial banks expect the National Bank of Romania (BNR) to keep the key interest rate at 2.5% on Tuesday, despite the rising inflation rate and the downward pressure on the exchange rate. The last adjustment to the key rate was made in May, 2018.


BRD, Banca Transilvania, BCR, Raiffeisen and ING are most profitable local banks

The aggregated profits of the three largest local banks by assets came close to RON 4 billion last year and accounted for nearly 60% of the entire banking system's profits, according to BNR. BRD-SocGen, the third biggest bank based on total assets, logged the biggest profits of the national banking market: RON 1.54 billion. It was followed by Banca Transilvania with RON 1.22 billion, while the third place went to BCR with RON 1.2 billion.


Who will pay the cost of Decree 114?

The damages caused by the "greed decree" amount to billions of euros, according to the estimates of affected companies and independent analysts. The amendments could increase the pressure on the affected markets, while also giving the European Commission more reasons to start the infringement procedure.


Foreign currency reserves down in March

The foreign currency reserves held by the National Bank of Romania (BNR) amounted to EUR 32 billion on March 31, down from EUR 32.5 billion on February 28. In March, inflows amounted to EUR 997 million, representing fluctuations in the minimum reserves set up by lenders, transfers to the Ministry of Finance accounts and the provisioning of the European Commission account, a BNR press release reported.


Senate passes gold reserves repatriation bill

The Senate passed on Monday the bill drafted by Liviu Dragnea and Serban Nicolae instructing the National Bank of Romania (BNR) to repatriate 91.5% of the gold reserves held abroad. The bill is now on its way to the Chamber of Deputies for the final vote.


Investment News (1)

Romania's Black Sea gas project hang by thread

Romania's new energy regulations risk undermining plans by companies to develop big offshore gas projects in the Black Sea, putting billions of dollars of revenue at risk and squandering a chance to challenge Russia's Gazprom in the region, according to Reuters. Oil industry officials have warned the changes, which include a cap on some gas prices for local producers until 2022 and a 2 percent turnover tax on all energy firms bar state-owned coal-fired power plants, could slash investment plans.


Legislative News (2)

Kindergarten becomes mandatory

Even the first year of kindergarten will become mandatory for all children by 2030, according to a bill reviewed by the Parliament and signed into law on Monday. The last year of kindergarten will become mandatory by 2020.


Senate endorses tax filing extension

The bill extending the deadline by which the new tax and social contributions returns must be filed until July 31 was passed by the Senate on Monday. 94 senators voted in favor and only 2 opposed the bill.


Politics (2)

President Iohannis wants referendum discussion

President Klaus Iohannis announced on Monday that he would meet with the Parliament again for fresh talks regarding the referendum. The president's stated intention is to "increase the scope" of the referendum announced for May 26 in order to make it "more effective and stronger".


PSD withholds opinion on referendum

The Social Democratic Party (PSD) announced that it would not express any point of view on the referendum until President Klaus Iohannis makes public the question that will be put on the ballot.


Social (1)

INS: Unemployment rate down

The seasonally-adjusted unemployment rate dropped 0.1 pp to 3.8% in February, compared to the previous month, according to data released by the National Statistics Institute (INS).