Daily Newsletter - 6 June 2019


Macroeconomic News (5)

Retail sector posts 7.1% turnover expansion

The retail sector turnover increased by 7.1% in April, compared to the corresponding month of 2018, according to data released by the National Statistics Institute (INS) on Wednesday. The previous month's growth rate had been 8.4%.


Private consumption to grow 5.3% in 2019, fall to 5% in 2020-2021

Private consumption, the main component of the GDP, will grow by 5.3% in 2019, close to last year's figure, before falling to 5% in 2020 and 2021, backed by a continued increase in the population's real disposable income and more active taxation, according to Andrei Radulescu, Director of Macroeconomic Analysis at Banca Transilvania.


World Bank upgrades national economy estimate

The World Bank revised the growth estimates for the Romanian economy to 3.6% in 2019, up 0.1 percentage points compared to the January forecast, according to the Global Economic Prospects report, which was published today.


Romania had the highest increase in industrial production prices in the European Union in April

Romania had the highest increase in industrial production prices in the European Union in April, compared with the previous year, according to data published by Eurostat on Wednesday. Industrial production prices grew by 6.7% in Romania, compared to April, 2018, while the EU growth figure was 2.9%. The second and third places went to Hungary (6.5%) and Latvia (5.6%).


Financial stability

Mugur Isarescu, Governor of the National Bank of Romania (BNR), said at yesterday's press conference that tension in the macroeconomic balance is the biggest systemic risk facing the country. During his presentation of the biannual report on financial stability, the governor praised the "impressive" growth of the national economy, which helped close the gap with the EU average, but complained of consumption being favored instead of investment.


Financial News (5)

Borrowing demand falls

A survey by the National Bank of Romania (BNR) on lending to non-financial corporations and retail clients shows that lending standards tightened significantly in the first quarter of the year for both property purchase and consumer loans. Lenders predict that, in the second quarter of the year, lending standards will become less stringent for real estate and moderate for consumer loans.


New greed tax could distort borrowing

The European Commission warned on Wednesday that Romania's financial stability was again under pressure in 2018 because of a series of legislative initiatives by the Government and Parliament after years of continued efforts to strengthen the financial sector. "The asset tax adopted by the Romanian Government through a decree at the end of December, 2018, without an impact assessment or consultations of all those involved, raised significant concerns about its negative impact on the prudential situation of banks, the pursuit of monetary policy and the growth of investments and the economy", according to the report.


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.


Cheap money from eurozone prevent BNR from fighting inflation

The European Central Bank is preparing new long-term financing operations for banks, unhappy with the low inflation rate and economic growth in the eurozone. Outside the monetary union, countries like Romania are facing high inflation, as well as the fact that they cannot afford to raise interest rates too much for fear of being flooded with hot money.


OTP Bank Romania posts increase in new farming financing

OTP Bank Romania has reported a 112% increase in the volume of new financing granted to agriculture clients in 2018, driven by high demand for double pre-financing of APIA SAPS subsidies, as well as investment loans.


Investment News (1)

OMV Petrom invested EUR 46 million in Petrobrazi refinery

Oil and gas producer OMV Petrom announced on Wednesday that it will continue the modernization of the Petrobrazi refinery. The company has invested approximately EUR 46 million in upgrading the coking plant since 2017. "A closed-loop rapid drainage system was implemented at this facility, totally eliminating any emissions of volatile organic compounds, thus helping reduce the environmental impact," the company said. OMV Petrom spent about EUR 1.6 billion in modernizing the Petrobrazi refinery between 2005-2018.


Politics (2)

President Iohannis urges parties to sign political agreement

President Klaus Iohannis announced on Wednesday, at the end of the two-day consultation with the parties making up the Parliament, that he was calling on those parties to sign a "national agreement to strengthen Romania's European path", a political pact for a European Romania.


PSD to analyze president's proposal

Representatives of the Social Democratic Party (PSD) say they learned from President Klaus Iohannis's press conference about his intention to propose a national political agreement to strengthen Romania's European path. PSD believes that a possible pact among all political parties must also contain some vital aspects for Romania's interest, such as support for "a single-speed European Union", the elimination of double standards and the condemnation of secret protocols.