News

Daily Newsletter - 8 May 2019

Summary

Macroeconomic News (3)

European Commission revises Romanian economy estimate down

The European Commission has revised its estimate for Romania's economy in 2019, slashing the growth forecast from 3.8% to 3.3% in the spring report. The trade deficit was revised upwards to 8% of the GDP, while the public debt is expected to reach 36% of the GDP. On the other hand, the inflation rate will stay at 3.6% this year, before falling to 3% in 2020.

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CNSP revises inflation estimate upwards

The National Strategy and Forecast Commission (CNSP) estimated the inflation rate at 3.2% for the end of this year, while also updating the average exchange rate estimate to RON 4.74 per EUR in the spring report. On the other hand, the Commission maintained the economic growth forecast at 5.5% for this year, but the nominal value of the gross domestic product was revised up slightly to RON 1.031 billion.

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Furniture, clothes and electro-IT shopping drives consumption

The turnover of the retail sector, which is the most important consumption tracker, increased by 8.4% in the first three months of this year, driven mainly by sales of non-food goods and fuels. Each of these two categories posted double-digit growth rates. On the other hand, food, beverages and tobacco sales grew only 3%.

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Financial News (4)

Banca Transilvania and Victoriabank granted the first Romania-Moldova cross-border syndicated loan

Banca Transilvania and Victoriabank granted the first Romania-Moldova cross-border syndicated loan. The EUR 21 million loan went to the MalDom Shopping Mall, developed by Lemi Invest, a joint venture between Fiba Holding and Summa Turizm Yatirimciligi. The Chisinau-based MallDova Shopping occupies 75,000 square meters and features 100 shops, restaurants, entertainment and cinema.

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IRCC is volatile, rising

The first quarter consumer credit benchmark index (IRBC, which replaces ROBOR) rose to 2.63%, according to the daily figures published by the National Bank of Romania (BNR). The politicians' efforts to replace ROBOR with a volatile and unpredictable index appear to be of little help to consumers. So far, BNR has officially approved only the average for the last quarter of last year - 2.36% -, which is used for loans granted until the end of June.

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ING expects to pay around EUR 11 million asset tax

"Financial taxes have become an important part of our cost base. We expect it to grow further as a result of the introduction of the new asset tax in Romania, which we estimate to be around EUR 11 million, at most EUR 12 million, a year," said Ralph Hammers, CEO of ING, during an audio conference with investors after the announcement of financial results for the first quarter of 2019.

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MFP wants to change government program

The Ministry of Finance (MFP) has recently released for public debate a draft order changing the interest calculation method for the "Prima Casa", "Prima Masina" and Invest in Yourself programs.

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Investment News (2)

Anti-hail system to be expanded

The anti-hail system will be expanded next year from Teleorman county to Dobrogea, while the Ialomita, Calarasi, Tulcea and Constanta counties will benefit from another type of protection, according to Petre Daea, the Minister of Agriculture. "While between 2004 and 2017 only seven launch points were set up, we, knowing and understanding this phenomenon, set up 60 launch points in 2017 and 2018, and another 65 will be brought online this year," said Daea.

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CTP builds new logistic park outside Sibiu

CTP, a developer of industrial parks, announced on Tuesday the beginning of development works on a new logistic park outside Sibiu. The future CTPark Sibiu II is estimated to cost a total of EUR 23 million. According to the company, the first Class A warehouse will be ready to receive tenants in about two months.

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Legislative News (2)

President signs construction regulations bill

President Klaus Iohannis signed the bill amending Law 10/1995 regarding the quality of construction works. The amendment bans the use of any new or refurbished construction unless an official verification and taking possession procedure is conducted.

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PM says referendum decree to be passed today

Prime Minister Viorica Dancila said that the referendum decree would be adopted at Wednesday's cabinet meeting. She added that she had not read the final draft.

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Politics (2)

Dragnea on cabinet restructuring

Liviu Dragnea, President of the Chamber of Deputies and leader of the Social Democratic Party (PSD), said holding a Parliament debate regarding the restructuring of the Cabinet. "It's no longer feasible to even talk of bringing this before the Parliament. The election is slightly more than two weeks away and it would be hard to gather a quorum for this," said Dragnea.

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President explains why PM not invited to Sibiu meeting

President Klaus Iohannis explained yesterday that Prime Minister Viorica Dancila had not been invited to the Sibiu summit because each state has only one representative at the event. All the meetings will be held in the European Council format, where Romania is represented by the head of state.

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Social (1)

More than 237,700 inactive people say they would work, but are not looking for work or cannot find vacancies

Last year, more than 237,700 inactive people said they would work, but were either not looking for work or could not find vacancies, according to data released by the National Statistics Institute (INS) on Tuesday. The potential workforce was down 15.3% from 2017.

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