Daily Newsletter - 2 May 2019


Macroeconomic News (4)

Unemployment rate down in March

Romania had a 3.8% seasonally adjusted unemployment rate in March, same as the previous month's. The eurozone reported an unemployment rate of 7.7%, the lowest since September, 2008, according to data released by Eurostat on Tuesday.


MFP borrows from retail clients

The Ministry of Finance (MFP) continues to borrow directly from retail clients through state bonds maturing in 1, 2, 3 and 5 years and bearing interest rates of 3.5%, 4%, 4.5% and 5%. The state has borrowed more than RON 1.4 billion since the beginning of the year, but bond sales plunged from RON 700 million in February to around RON 200 million in April.


Eurozone economy beats expectations

The eurozone economy saw its growth rate double in the first quarter of this year, while the unemployment rate declined in March, according to data released by Eurostat on Tuesday. According to a preliminary estimate, the euro area Gross Domestic Product increased by 0.4% in the first three months of this year, after a 0.2% gain in the last quarter of 2018. The figure announced by Eurostat is superior to the estimates of Factset analysts, which stood at 0.3%, and suggests that the eurozone economy is picking up speed.


Number of insolvent companies down more than 30% in Q1

The number of insolvent companies dropped to 1,509 in the first three months of this year, down 34.53% from the corresponding period of 2018, according to the Trade Registry (ONRC). This is the third consecutive drop since the beginning of the year.


Financial News (3)

Garanti Bank posts RON 111 million in earnings

Garanti Bank Romania, the local subsidiary of the Turkish group of the same name, posted total assets worth RON 10.25 billion for 2018, up 2.7% from the RON 9.9 billion reported at the end of 2017. The earnings distributed to shareholders decreased by 13% to RON 111 million, shows the annual financial report.


Idea Bank expects 6.7% drop in earnings

Idea Bank, formerly known as the Romanian International Bank, has budgeted RON 7.8 million in earnings for this year, down 6.7% from the RON 8.36 million posted for 2018, according to a report sent to the Bucharest Stock Exchange (BVB). The bank expects assets to grow 8%, compared to 13% in the past year, correlated with a 12% increase in net loans. The strategic asset target for this year is RON 2.311 billion.


BNR announced new benchmark rate

The National Bank of Romania (BNR) will publish, starting May 2, the new benchmark rate that will be used to calculate the installments of all new loans. The calculation method is regulated by Decree 19/2019.


Investment News (1)

Zentiva to invest EUR 5.39 million in production capacity

Zentiva, one of the leading local drug manufacturers, has planned for this year investment projects worth EUR 5.39 million to increase production capacity, ensure compliance with good manufacturing practice standards and upgrade production equipment, according to a report set to the Bucharest Stock Exchange (BVB).


Legislative News (1)

Senator Zamfir vows to cap interest rates

The Constitutional Court declared unconstitutional the bill capping the interest rates of loans because it lacked sufficient background documentation, as well as the Economic and Social Council's opinion. Senator Daniel Zamfir (ALDE) said he would draft by next week a new bill that takes the CCR criticism into account. On the other hand, the Court has also failed to analyze the formal criticism of the law brought by the opposition parties.


Politics (2)

Election campaign begins

The election campaign for the European Parliament started officially on April 27, at 00:00, and will end on May 25, at 7:00. 13 parties and 3 independent candidates were validated by the BEC to enter the race. Romania will send 32 MEPs to Brussels for a 5-year term.


PM Dancila: "This year's election to have major impact on EU institutional configuration"

This year's European Parliament election will have a major impact on the European Union's institutional configuration, while also serving as a good opportunity to confirm the member states' common commitment to the European project, according to statements by Prime Minister Viorica Dancila.


Social (1)

Children assistance increases

The government will begin paying higher children assistance benefits this month, as per Decree 19/2019. The new figure is RON 300 per child under the age of 2, and RON 150 per child between the ages of 2 and 18.