Daily Newsletter
31 August 2018
Summary
Macroeconomic News (5) |
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BNS accused government of failing to absorb EU funds
Romania had and still has financial resources at its disposal. However, the authorities are either incapable or unwilling to invest the funds lying in the Ministry of Finance's (MFP) accounts into various programs that would benefit employees, the unemployed, the disadvantaged or the national education system, according to a press release issued by the National Labor Bloc (BNS). Top |
Concordia confederation urges prudence and realism in drafting Pension Act
The Employers Confederation Concordia (CPC) took note of the public debate regarding the new draft law on pensions and will participate in the debates as a constructive attempt to improve the proposed draft law. CPC highlighted that the recently submitted form of the draft law would raise the issue of financing sources, given that in the next 4 years the economic growth rate, and consequently the level of the budget revenues, would face much lower growth rates, according to public estimates. “The problem is whether the new levels can be secured and maintained without seriously distorting the economy. We insist on this, especially as both demographic developments and the migration balance will raise the share of pensioners in the total population in the following years, and the pension budget will increasingly depend on transfers to the state budget”. CPC considers essential that, in order to avoid unrealistic expectations from the people, the debates on the draft law should start from the real resources of the Romanian economy, focusing on those for financing the measure through an impact analysis of the economic development, including the labor market. Top |
Budget deficit at 1.26% of GDP
The budget deficit reported for January-July was 1.26% of the GDP, the equivalent of RON 11.9 billion, according to the official document posted on the Ministry of Finance's (MFP) website. The state budget's revenues were higher than expected in July, thanks to quarterly VAT payments, taxes on microenterprises and profit tax payments. Nevertheless, the deficit is more than twice higher compared to the corresponding period of 2017. Top |
Consumer goods market expanded 8.4% in H1
The consumer goods market grew 8.4% in the first half of this year, compared to the corresponding period of 2017. The main drivers were the 4% inflation rate and the increase in the volume of goods sold by retailers, according to a study by market research firm GfK. Top |
Employers want pension law suited to national economy
The Concordia Employers Confederation (CPC) has taken note of the public debate on the draft new Pension Law and urged the authorities to show prudence and realism in order to avoid creating unrealistic expectations. CPC representatives will take part in the public debate in an attempt to improve the draft bill. Top |
Financial News (2) |
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Banking system posts record earnings
The national banking system posted RON 3.56 billion in earnings for the first half of this year, up more than 30% year-on-year following an increase in both borrowing and interest rates, along with the ongoing improvement in portfolio quality. Return on equity reached 15.7%, up 0.3 pp on the quarter and up 3.22 pp on the year. Top |
The banking sector reported an NPL rate of 5.71% for the first six months of this year, the lowest in four years and a fourfold drop since 2014, according to BNR. Four years ago, almost a quarter of all local loans were non-performing, going as high as 30% in the case of major banks. Although the NPL rate has been significantly reduced since then, it is still above the EU average of 3.9%. Top |
Investment News (1) |
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SIF Moldova to invest more than EUR 100 million in residential project
Straulesti Lac Alfa SA, a company owned by SIF Moldova and Cityring Property, announced the launching of its second major residential project. The 1,400 flats that make up the second project will be built at the site of the former Tesatoriile Reunite factory. This project is worth more than EUR 100 million. Top |
Politics (1) |
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US Ambassador met with Liviu Dragnea
The US Ambassador to Bucharest, Hans Klemm, stated that he had met on Wednesday with the President of the Chamber of Deputies, Liviu Dragnea. The two discussed "many things", with the economic relationship between the two countries being the main issue. Top |
Social (2) |
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Vocational and dual education systems can enroll up to 21,000 students
The vocational and dual education systems can enroll up to 21,000 students in the second enrollment period for the 2018-2019 academic year, according to the Ministry of Education. The enrollment campaign starts on Friday. Top |
Demographic decline is major problem
The demographic situation is a constant source of bad news. The resident population of Romania shrank by 120,700 in 2017. The negative increase, the rising death rate and the ongoing migration phenomenon contribute to this bad situation, followed by the lack of policies designed to encourage Romanians to have children. Top |