Daily Newsletter - 5 December 2017


Macroeconomic News (3)

Romania meets 12 out of 14 criteria 

Romania met last year 12 of the 14 indicators configured for the macroeconomic situation dashboard of EU member states. From the point of view of a balanced economy, Romania is part of the main pack, falling away from the top three positions it shared with the Czech Republic and Poland in 2015. The macroeconomic imbalance procedure is a supervisory system designed to identify the risk of macroeconomic imbalance as early as possible and to take steps to correct it.


Romania ranks sixth in EU cereals production index 

Romania accounts for 7.2% of the European Union's total cereals output, which amounted to 301.8 million tons last year. EU farmers grew cereals on more than 57 million hectares of farmland. "We can do better. I expect Romania to reach a total output of 30 million tons in the next ten years," said Nicolae Sitaru, owner of the Elsit farm.


Industrial prices up in October 

The Eurozone and the European Union reported a 0.4% increase of the industrial production prices for October, compared to the previous month, according to information released on Monday by the European Statistics Office. Almost all EU member states reported rising industrial production prices for October, except for Denmark, Cyprus, Latvia and Estonia.


Financial News (5)

ROBOR rate up 

The three-month ROBOR rate, which is used to calculate the cost of adjustable rate loans, increased yesterday from 2.20% to 2.21%, according to data released by the National Bank of Romania (BNR). This is the highest figure since October 27, 2014. The six-month rate jumped from 2.34% to 2.35%.


Prima Casa should focus on people who earn less than average salary 

The Prima Casa program should be modified next year in order to focus on people who earn less than the average salary, according to Liviu Voinea, Deputy Governor of the National Bank of Romania (BNR). The BNR official complained that some of the program's budget has gone to people who can afford more expensive housing and advised debtors to take out fixed interest loans in order to protect themselves against future rate fluctuations. He also warned about the rising indebtedness rate among Romania's low income citizens.


2 pp increase in interest rates would push NPL rate to 7.3% 

The NPL rate would jump from 5.8% to 7.3% in one year if the interest rate gained another 200 base points, according to the Financial Stability Report. "In such a situation, debtors should be kept informed about the risks they could face in the medium term, in order to prevent going into debt on terms that would later cause repayment problems," noted the report.


BNR issues warning 

Romanians who take out flat interest loans will enjoy better protection compared to those who accept adjustable interest rates, according to public advice offered by Liviu Voinea, Deputy Governor of the National Bank of Romania (BNR). The BNR official has thus issued a warning about the high likelihood of rising interest rates.


Banking sector continues restructuring process 

The restructuring of the national banking system continued in the first nine months of this year. The aggregated workforce dropped below 55,000, a ten-year low, while the number of branch offices fell below 4,600. Between January and September, the banks closed 175 offices and laid off 439 workers, according to data released by the National Bank of Romania (BNR).


Investment News (1)

eMag invests RON 300 million in new warehouse 

eMag, the country's biggest online retailer, announced on Wednesday it would invest RON 300 million in a 120,000 sqm warehouse located outside Bucharest in an attempt to expand its logistic capacity. The new deposit will be built from scratch and is expected to be ready by early 2019. The site of the future facility is close to the company's existing warehouse.


Legislative News (2)

Senate passes new tax bill 

Companies with at least RON 45,000 in subscribed capital and at least 2 employees will be allowed to choose between the 16% profit tax and the 1% turnover tax, according to an amendment tacked by the Senate on the Cabinet's emergency decree. The amendment needs the Chamber's approval before becoming law. The Cabinet had increased the cap for companies that pay the turnover tax from EUR 500,000 to EUR 1 million.


Senate let more than 20 bills pass into law 

The Senate allowed 23 bills to pass into law on Monday. The bills were supposed to be debated and voted on by November 27. Among them was the Iasi-Targu Mures Highway project and the bill supporting Romanian minorities abroad in 2018, the 100th anniversary of the Grand Union.


Politics (2)

ALDE leader rejects rally 

Calin Popescu-Tariceanu, president of the Alliance of Liberals and Democrats (ALDE), said that support rallies are not necessary. However, he added that "people are free to protest". Asked whether ALDE officials would take part in the rallies organized by the PSD on December 9, Tariceanu said: "I don't know who organizes rallies. I was not informed, but people are free to protest. It's been happening for so long. There's a tendency to move the political disputes, the political struggle, from the Parliament, which is the democratic forum, to the street".


Rovana Plumb blasts PM Tudose, sides with Mayor Firea 

Rovana Plumb, the former minister of EU funds, criticized Prime Minister Mihai Tudose for his recent statements, which Plumb sees as "often not coinciding with the positions taken by party colleagues". Plumb added that the PSD would decide whether Tudose would share Grindeanu's fate.