Daily Newsletter - 3 January 2018


Macroeconomic News (4)

Salaries up 14% on average 

The net average salary reached almost RON 2,400 in October, 2017, up 14% on an annual basis, according to the latest information from the National Statistics Institute (INS). The main factors behind this trend were the minimum salary increase, the state payroll expansion and the upward trend of private salaries.


Government to borrow RON 50 billion at home and EUR 5 billion abroad 

The Ministry of Finance (MFP) is planning to borrow around EUR 4.5-5 billion from the foreign markets this year, depending on terms and opportunities, a 60% increase from last year. Another EUR 48-50 billion will be borrowed from local banks, according to the state bond issue scheduled for 2018. The country needs around EUR 74 billion in gross financing this year to cover the expected budget deficit.


IT&C industry to pass 6% of GDP this year 

The National Bank of Romania (BNR) said the IT&C sector would reach 6.2% of the GDP this year, compared to 5.5% in 2016. This is the most dynamic sector of the national economy. The strong growth an this industry that employs more than 100,000 people was driven by both tax incentives (programmers pay no income tax) and the relatively low cost of labor.


2018 estimates 

The National Forecast Commission (CNP) is working on the economy estimates for 2018, which the government uses to put together the state budget. These are the most important estimates released by CNP: the GDP will grow 5.5% compared to this year, reaching a total of RON 907.9 billion at the end of 2018, and the average exchange rate will be RON 4.55 per EUR.


Financial News (4)

BNR released around EUR 500 million in banking capital last year 

"Romania has largely escaped the euro-ization and can afford a more flexible exchange rate," according to the National Bank of Romania's (BNR) Governor, Mugur Isarescu. The statement was made after the last monetary policy meeting of 2017. BNR is leaving "an empire of foreign currency denominated loans," that imposed many constraints on the monetary policy and is entering a place where the key interest rate is the market reference.


BNR issued new bills and coins 

The bills and coins featuring the country's new seal, including the gold eagle bearing the Steel Crown, were released on Monday by the National Bank of Romania (BNR). The bills and coins bear the date of January 1, 2018, and will be used alongside the existing ones.


2017 was a good year for banks 

2017 was a good year for the banking sector. Profits rose and the Parliament passed fewer bad bills. However, the sector was no spared controversy and, for the first time, the hostile rhetoric came from the Cabinet. The consolidation process continued, but none of the acquisitions announced this year has been completed before December 31. Private borrowing jumped 6.8% in November, compared to a 1.6% growth rate in 2016.


"The national currency depreciated because of the forex market slump" 

Friday's depreciation of the national currency is partly the responsibility of a forex market slump at the end of the year, coupled with attempts by market players to position themselves for the next trading session, according to Adrian Vasilescu, a BNR strategy adviser.


Investment News (2)

Ministry of Development launched two calls for projects 

At the end of 2017, the Ministry of Development launched a series of calls for projects in the fields of education, water transport, air transport, labor market and business community. The projects will be financed with EUR 2.3 billion worth of European Union funds. The education sector has the biggest budget (EUR 387 billion), followed by transportation (EUR 325 million).


15 infrastructure projects under review 

The Pro Infrastructura Association reviewed 15 infrastructure projects and concluded that 83.5 kilometers of highway could be completed this year, but only 63 kilometers will be actually available. The projects had been promised by the Minister of Transport, Felix Stroe.