News

Daily Newsletter - 5 June 2019

Summary

Macroeconomic News (3)

Budget adjustment to reach EUR 3 billion, investment out of question

The consolidated state budget recorded, after the first four months of 2019, a deficit of RON 11.4 billion, the equivalent of 1.11% of the current year's GDP estimate. The figure is 70% lower compared to the same period of last year, when the deficit was just over RON 6 billion - 0.65% of GDP.

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Chamber commission meets IMF delegation

Representatives of the International Monetary Fund expressed their concern at a meeting with members of the Chamber of Deputies' Budget and Finance Committee "some concerns" about the country's budget deficit and the lack of investments in infrastructure, health and education, said commission president Sorin Lazar (PSD). The IMF delegation also praised Romania's economic growth and achievements.

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BNR Governor says Romania needs trade surplus

National Bank of Romania (BNR) Governor Mugur Isarescu said yesterday, June 3, in a speech delivered at the AmCham CEO Forum, that despite the post-crisis economic growth, which reached an average annual rate of 4.6% over the past five years, the national industry has lost ground, while external demand has not made a positive contribution to GDP growth since 2013, leading to a worsening of the current account deficit.

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Financial News (3)

Retail borrowing conditions tightened in Q1

In the first quarter of the year there was a significant tightening of retail lending standards, including both real estate loans and consumer credit. Lenders expect a further tightening of credit standards in the second quarter, according to a survey published by the National Bank of Romania (BNR) on Tuesday.

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RON gains ground

The fact that Romanian voters eschewed populism in the recent European Parliament elections has caught the eye of small foreign investors. Under the new market conditions, yesterday's government securities issues were oversubscribed fourfold. Small investors are rushing to buy Romanian government bonds alongside other investment instruments in Central and Eastern Europe, exchanging their euros for RON.

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Radu Ghetea: Initiatives impacting banking should be discussed with industry

Radu Gratian Ghetea, former president of CEC Bank and honorary president of the Romanian Banking Association (ARB), says the recent bank asset tax, as well as other bills declared unconstitutional show that initiatives impacting banks need to be discussed with industry before they are made public in order not to disturb the market.

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Investment News (1)

Metrorex promises subway line inauguration in December

Subway line 5 of the Bucharest system, Drumul Taberei-Eroilor, will be ready in December, after eight years of construction work, according to the CEO of Metrorex. Dumitru Sodolescu took the opportunity to announce a new investment plan, worth RON 5.1 billion.

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Politics (1)

PM Dancila in Brussels

Prime Minister Viorica Dancila said on Tuesday that she had met with the president and the first vice-president of the European Commission in order to discuss the current situation in the Cabinet and the Social Democratic Party (PSD) and that the discussions on the Cooperation and Verification Mechanism were resumed.

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Social (2)

Unemployment rate up

The unemployment rate climbed to 4% in seasonally adjusted figures in April, up 0.1 from the previous month, according to data submitted by the National Institute of Statistics (INS) on Tuesday. The number of unemployed (aged 15-74) estimated for April 2019 was 354,000, up from the previous month (347,000 persons), but down from the corresponding month of the previous year (395,000 people).

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Young people worried about pensions, not interested in saving

Less than half of Romania's young people aged between 18 and 38 years are saving on a regular basis, while 17.11% do not save at all. More than 70% of young people in Romania claim they are happy to manage their personal finances, although the majority (61.45%) worry about the future and find it difficult to save money frequently, according to Revolut's Millennial Money Report.

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