News

Daily Newsletter - 26 January 2021

Summary

Macroeconomic News (4)

Citu: Pension costs to increase almost RON 8 billion

"Pensions, the cost of pensions in the 2021 budget is already increasing by almost RON 8 billion, compared to last year, because of last year's pension increase. Here, you realize... 8 billion means about 0.8% of GDP, plus an increase in children aid, last year's increase plus this year's increase, almost 3 billion more, we're talking about an additional 1.1% of GDP compared to what we had in last year's budget," said Prime Minister Citu.

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Half of retailers exposed to high insolvency risk

The non-specialized sector of the retail industry reported revenues worth RON 79.4 billion for 2019, up 10% compared to the previous year, according to a study conducted by Coface Romania. On the other hand, the firm thinks that one of the sector's vulnerabilities is that approximately 49% of companies are exposed to a high risk of insolvency.

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Romania's public debt during the pandemic

In the context of the economic crisis generated by the Covid pandemic, Romania's public debt stood at 43.1% of GDP at the end of Q3 2020, slightly higher than the EU average compared to the previous quarter, but significantly below the same average compared to Q3 2019, according to official data released by Eurostat.

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IT market after one year of work from home

The COVID-19 pandemic has changed the way many companies work, especially in the IT industry. Some large companies emptied their offices and allowed employees to work from home. The data released by the Timis Territorial Labor Inspectorate (ITM), for example, show that approximately 25,000 people were worked from home in the county in November. Most are employees of multinationals or employees of IT or automotive companies.

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Financial News (4)

Andrei Radulescu, BT: "The favorable period for the international financial markets could extend until May"

The current favorable period for the international financial markets could extend until the end of the financial reporting season for the first quarter of 2021, respectively until May, according to Andrei Radulescu, head of Macroeconomic Analysis at Banca Transilvania. Radulescu pointed out in a report that recent developments in macro-financial indicators are likely to support the upward trend in stock indexes in the short term.

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3M ROBOR falls to 1.58%

The three-month ROBOR rate, which is used to calculate the adjustable interest rates of RON-denominated loans, fell to 1.58% on Monday, the lowest figure since September 29, 2017, according to the National Bank of Romania (BNR). The fall was the result of BNR's recent adjustment of the key rate.

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Roxana Iliu, Libra Internet Bank: Speed is one of the clients' top needs

Libra Internet Bank, a member of US investment group New Century Holdings, was the third bank in Romania to join the instant interbank payment system, as early as 2019. LIB included this option, free of charge, in its standard packages for retail clients, said Roxana Iliu, COO of Libra Internet Bank.

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Cash up 18.7% in 11 months

The cash in circulation reached RON 87.9 billion in November, 2020, up 19% compared to the corresponding month of the previous year, according to the latest data from the National Bank of Romania (BNR). The population's decision to turn to cash is a common phenomenon in times of crisis. In fact, BNR Governor Mugur Isarescu pointed out that, since the beginning of the pandemic, BNR has had to provide additional liquidity to the banking system in order to cover the very high demand from companies and individuals.

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Investment News (2)

Bucharest City Hall to resume major investment projects

Representatives of the Bucharest City Hall (PMB) stated that work on the ongoing major investment project would resume next month. The City Hall will restart the construction of the Doamna Ghica Overpass and the infrastructure projects in Prelungirea Ghencea. Work is currently at a standstill because of bad weather and because the City Hall's accounts are frozen.

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Vodafone to invest EUR 20 million in digital skills

The Vodafone telecom group announced on Monday that it would invest EUR 20 million over the next five years to expand the digital skills and educational programs of the Vodafone Foundation. The company will fund local initiatives in 14 countries, including Romania. This project could benefit 16 million students by 2025.

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Legislative News (1)

Cabinet to amend payroll, pension laws

Prime Minister Florin Citu said on Monday that the Cabinet is working on overhauling the unified payroll law and the pension law in order to eliminate the inequities caused by these laws.

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Politics (2)

PSD leader to meet union representatives

Marcel Ciolacu, leader of the Social Democratic Party (PSD), announced that he would meet today with the leaders of the main labor confederations in order to build the alternative budget for 2021. The alternative budget would be unveiled on Wednesday.

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Dan Barna: The budget is under immense pressure

Romania's budget is under a lot of pressure at this time because it needs to avoid exceeding the 7% deficit agreed with the European Commission (EC), according to Deputy Prime Minister Dan Barna.

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