News

Daily Newsletter - 17 April 2018

Summary

FIC (1)

Foreign investors calling on Parliament, Gov't to clarify transfer of social security contributions 

The transfer of contributions in just a few months has generated lot of bureaucracy at the level of employers and employees and costs that are hard to quantify. FIC believes it will be a sign of respect towards the business community in Romania that policy makers put an end to this uncertainty.

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Macroeconomic News (4)

Corporate services slowed down in February 

The corporate services sector reported a 5% growth rate for February, a significant drop from the 15.6% growth rate logged in January, according to the National Statistics Institute (INS). February's growth was driven mainly by services provided to plants and factories (11.2%), followed by communications activities (4.9%) and cinema and TV production and broadcasting (4.3%).

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Macroeconomic confidence indicator showed marginal growth 

CFA Romania's macroeconomic indicator gained 0.9 points in March, rising to 47.6 points thanks to the forecast component, according to a press release. The current conditions component dropped 2.9 points to 64.2 points. More than 83% of the analysts polled by CFA Romania expect the national currency to depreciate in the next 12 months.

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Fiscal Council releases analysis 

Romania is trapped in fiscal and payroll policies that are hostile to sustainable long-term development. One of the biggest arguments is the output gap between the GDP and its potential, resulting from a procyclic policy of slashing taxes during an economic boom, according to economist Ionut Dumitru.

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Wholesale sector reports 5.8% growth rate 

The turnover reported by the wholesale sector increased by 5.8% in February, a major drop from the 13.5% posted for January, according to the data released on Monday by the National Statistics Institute (INS).

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Financial News (3)

Nonresidents' long-term deposits dropped to EUR 3.2 billion 

The aggregated value of long-term deposits opened by nonresidents in Romanian banks dropped to EUR 2.3 billion at the end of February, a new low. Nonresidents withdrew around EUR 1 billion from their local accounts last year. Compared to the end of 2017, the value of nonresidents' deposits was down EUR 254 million.

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Inflation is pushing interest rates up 

The inflation rate has caught up with the interest rates of new corporate loans, a situation that will have a significant impact on the economy. The inflation rate reached 4.95% per year in March, while the average rate of new loans is 5.02%, according to the National Bank of Romania (BNR). The interest rates trend was driven in part by last September's liquidity crisis.

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Interest rates are rising 

The National Bank of Romania (BNR) launched unexpectedly on Monday the first operation for attracting deposits from the commercial banks since January, 2011. The move is seen as an attempt to bring the market interest rates closer to the key rate. The commercial banks deposited RON 18.66 billion worth of excess liquidity with BNR at 2.25% per year.

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Investment News (1)

Bucharest City Hall to spend RON 275 million on centralized heating system 

The Bucharest City Hall is planning to spend almost RON 275 million on rehabilitating 31.6 kilometers of pipes used by the centralized heating system, according to a decision scheduled for debate by the City Council. The investment project is expected to take two years and its purpose is to address the loss of more than 10 million of tons of water every year because of the system's degradation.

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Legislative News (1)

Deputies resume discussion of S&L bank bill 

The amendments to the S&L Banks Act are expected to reach the Budget, Finance and Banking Commission of the Chamber of Deputies next week, according to Deputy Marius Budai, president of the commission. The bill was sent back to commissions from the floor last year and received a new nod from the Cabinet at the end of March.

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Politics (2)

President Iohannis rejects request to sack Kovesi 

Laura Kovesi will remain the chief-prosecutor of the National Anti-Corruption Directorate (DNA), according to the decision announced by President Iohannis on Monday. "The reasons presented by the Minister of Justice failed to convince me. Moreover, these reasons fall outside the applicable legislation. As a result, I will not approve the Minister's request to revoke the mandate granted to Mrs. Kovesi, Chief-Prosecutor of the DNA," said the President.

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PSD won't suspend Iohannis 

The Social Democratic Party (PSD) is not considering any move to suspend President Klaus Iohannis should the latter refuse to sack DNA head Laura Kovesi, according to party leader Liviu Dragnea. "Under no circumstance are we considering this. Absolutely not," said Dragnea at the end of the Executive Committee meeting.

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