News

Daily Newsletter - 3 June 2019

Summary

FIC (1)

Does Romania need foreign investments for the following 20 years?

If Romania invests today in infrastructure, productivity will increase. It would be the most effective and quickest effect for sustainable economic growth. This does not come overnight but in two or three years, said Franz Weiler, President of the Foreign Investors Council (FIC). The development of the automotive industry is proof of Romania's economic potential and the impact of foreign investment in this industry is visible. At the beginning of 2019, Christophe Dridi, Board Member FIC and Managing Director Group Renault and CEO Automobile Dacia announced new investments of EUR 800 million in Romania, but underlined the importance of infrastructure development, which is essential from a logistic point of view. (This video is part of the FIC campaign -  Foreign Investments in Romania, FiR)

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Macroeconomic News (4)

State payroll to reach 12% of GDP by 2020

The salaries of Romania's 1.2 million public employees generated EUR 22 billion in 2018 spending, the equivalent of 11% of GDP, according to AMECO, the European Commission's macroeconomic database. Romania ranked 11th in the European Union's payroll index in 2018, compared to 15th place in the GDP level (about EUR 200 billion) index.

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Romanian industry barometer

The modest increased reported by the Romanian industry in March petered out April. The weak and fluctuating growth suggests that the industry is going through a state of stress and fatigue, according to the IRSOP and SNSPA monthly industrial barometer, which was published on Friday.

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IT employers react to Orban statement

The elimination of tax breaks would affect the competitiveness of the Romanian IT industry and would generate a massive exodus of specialists at a time when the entire European Union is facing a shortage of such specialists, according to the Employers' Association of the Software and Services Industry (ANIS). The statement came in reply to PNL leader Ludovic Orban's recent opposition to the income tax exemption granted to IT workers.

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Romania is vulnerable to trade wars

Romania is one of the countries vulnerable to trade wars, according to a Bloomberg analysis of 21 developing economies around the world. The most exposed economies are Croatia and Mexico. Romania ranked 18th out of 21, with Egypt and the Philippines being the best positioned.

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Financial News (3)

What happens to "Prima Casa" applications?

The "Prima Casa" program will continue until the bill establishing the A Home for Every Family program is published in the Official Monitor. Pending applications will be approved under the terms of the "Prima Casa" program.

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Banking system reported earnings worth RON 1.84 billion

The National Bank of Romania (BNR) announced RON 1.84 billion in earnings for the national banking system in the first quarter of the year, up from RON 1.82 billion in the corresponding period of 2018. The number of profitable lenders increased from 22 to 24, out of a total of 34.

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Nonresidents buy more state bonds

The nonresidents' share of state bonds sold on the domestic market returned above 20% in February, after a dip in January. The banks are still the biggest holders of state bonds, accounting for 44.3% of the total, while private pension funds increased their share from 18.2% to 19%.

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Legislative News (1)

VAT rate for traditional products to fall to 5%

The VAT rate for traditional products was lowered from 9% to 5% on June 1, as per Government Emergency Decree 31/2019.

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Politics (2)

President Iohannis met Sibiu liberals

President Klaus Iohannis and PNL leader Ludovic Orban met on Saturday with members of the party's Sibiu organization and congratulated them for the good performance in the European Parliament election.

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PNL leaders to meet today

The leaders of the National Liberal Party (PNL) will meet on Monday. One of the possible topics on the agenda is the result of the European Parliament election. Underperforming party organizations, such as the Bucharest organization, could see their leaders removed.

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Social (1)

Cabinet to help flooding victims

The Cabinet announced on Saturday that urgent steps would be taken to help the victims of flooding, based on a report requested from the Ministry of Internal Affairs (MAI). "Prime Minister Viorica Dancila asked the Ministry of Internal Affairs to produce a detailed report on the effects of the floods and dangerous meteorological phenomena from the past days. Based on this analysis, the Government will take urgent measures to support the people and the communities that have suffered and whose social objectives or infrastructure was affected," reads a press release.

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