News

Daily Newsletter - 20 July 2020

Summary

Macroeconomic News (4)

Ministry of Agriculture estimates 5.4 million tons wheat harvest

Romania's total wheat production estimated for 2020 by the County Agricultural Directorates (DAJ), before harvest, was 5.4 million tons, while the United States Department of Agriculture (USDA) forecast on July 10 a harvest of 7.42 million tons, according to the Ministry of Agriculture and Rural Development (MADR). By July 13, 43.36% of the wheat acreage had already been harvested, yielding 2.75 tons.

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Cabinet to allocate drought compensation

Prime Minister Ludovic Orban announced that the budget rectification will provide the necessary amounts to compensate farmers whose crops have been affected by drought this year, but added that the compensation will be distributed to farmers only after the Romanian authorities receive the European Commission's approval. "We cannot pay compensation whenever we want to. Because many farmers work the land under different legal forms, various companies, compensations take the form of state aid and we need the approval of the European Commission," said Orban.

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Romania had fourth biggest increase in consumer prices in EU

Romania reported for June the fourth biggest increase in consumer prices in the European Union, according to Eurostat. The inflation rate increased from 1.8% in May to 2.2% in June.

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Cabinet keeps talking about need to increase manufacturing

Commerce - from retail to wholesale - is the best represented sector in the economy, based on the number of SMEs. Commerce is also Romania's biggest "industry", based on the 2018 turnover. Manufacturing is missing from the top 10. The index of economic sectors that secured funding through the SME Invest program is headed by transport (7.8%), followed by construction (4.4).

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Financial News (3)

BNR fights pandemic generated crisis

Developments in public health continue to generate unprecedented uncertainties and major risks to the economic activity outlook and the functioning of the financial markets, with an impact on macroeconomic stability and financial stability, and, under these conditions, the National Bank of Romania (BNR) will continue to monitor all relevant developments and update evaluations, while continuing to provide the necessary liquidity to the banking system, without affecting the relative stability of the exchange rate.

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Florin Citu: There's no risk of running out of money this year

Romania is not at risk of running out of money this year because the budget deficit financing is assured for the entire year, including a significant buffer for the next cabinet, according to Finance Minister Florin Citu. "We have the financing for this year, we are up to date, we know exactly how much we have to pay for each bill and we have taken worse scenarios into account," said Citu.

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The liquidity deficit on the money market remained relatively high

The liquidity deficit on the monetary market remained relatively high, said the Governor of the National Bank of Romania (BNR), Mugur Isarescu. The Governor pointed out that BNR continued to provide liquidity to lenders through repo operations performed on a bilateral basis, with the daily average of the stock of these operations being about RON 3.7 billion between June 15 and July 15. BNR also continued to buy RON-denominated government bonds on the secondary market, with purchases reaching almost RON 4.4 billion on July 15.

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Investment News (1)

Burger King wants to expand in Romania

After opening a restaurant in Central Bucharest while the pandemic was going strong, Burger King confirmed the news that it wants to expand in Romania and, implicitly, to hire more staff. Before the pandemic, the company was planning to open six new locations, some of which are already being set up.

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Legislative News (1)

Quarantine law published in Official Monitor

The quarantine and isolation law was published in the Official Monitor. The law had been adopted by the Senate on Thursday evening, as the decision-making body, and signed by President Klaus Iohannis on Saturday.

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Politics (2)

Progress in USR-PNL negotiations

Claudiu Nasui, President of the Save Romania Union's (USR) Bucharest organization, and Vlad Voiculescu, President of PLUS Bucharest, announced at a press conference held on Sunday that negotiations with the National Liberal Party for common tickets in the city's districts are progressing.

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PSD supports September 27 election

Lucian Romascanu, spokesman for the Social Democratic Party (PSD), said the party supports September 27 as the local election date because the local administration needs elections "as soon as possible".

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Social (1)

Nelu Tataru said 6,000-7,000 tests are waiting to be processed every day

The Minister of Health, Nelu Tataru, said thousands of COVID samples are waiting to be processed and that laboratories may have to work three shifts in order to reach a testing capacity of 28,000 units per 24 hours.

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