Radio România Internațional

Tag: economic growth forecast

  • May 3, 2022

    May 3, 2022

    WAR IN UKRAINE – The European Commission is today
    discussing the sixth package of sanctions against Russia, which might include a
    spaced-out embargo on oil imports. Yesterday’s meeting of the EU Energy Ministers
    underlined, however, the lack of consensus regarding sanctions on Russian
    energy imports. Whereas Germany seems willing to curb its reliance on oil
    imports from the Russian Federation, Hungary again has opposed the move.
    Earlier today, Slovakia announced it will try to obtain an exemption from any
    embargo on Russian oil agreed at EU level. Meanwhile, American and British
    officials believe Russia is preparing to officially declare war on Ukraine in
    order to mobilize its reserve army, in an attempt to conquer the east and south
    of Ukraine. At the same time, the US ambassador to the OSCE, quoted by our
    Washington correspondent, says Russia is ready to annex new Ukrainian
    territories.




    NATURAL GAS – The Romanian state-owned company Romgaz is expected
    to complete the deal allowing the American company ExxonMobil to exploit the
    natural gas deposits in the Black Sea, in the Neptune Deep offshore field. Some
    100 billion cubic meters of gas are expected to be extracted from the area,
    while exploitation rights are owned by ExxonMobil and OMV Petrom in equal
    shares. Romgaz will pay over $1 billion for today’s contract. Before extraction
    works can start, investors expect Romanian authorities to modify the offshore
    law, which the Senate’s special committees started debating today. The main
    modifications to the document adopted four years ago have to do with lowering
    exploitation taxes for deposits in the Black Sea as well as on land, as well as
    with the elimination of restrictions on prices, all part of a legal framework
    to ensure predictability. The Romanian state and state-owned enterprises will
    be given priority to buy the resulting output, while 60% of the profit will go
    to the state. Additionally, companies will be able to deduct 40% of their
    investment, compared to 30% under the current legislation.


    FORECAST – The National Strategy and Forecast Company
    downgraded to 2.9% the economic growth forecast for this year, compared to 4.3%
    previously. The Commission says the overlapping shocks generated by the energy
    price hikes which impacted global supply chains) are amplifying the risks and
    economic uncertainty, also impacting the short-term evolution of the business
    sector. The forecast is in line with the estimates presented by international
    financial institutions, which significantly lowered their forecast regarding
    Romania’s economic growth in 2022. The IMF recently estimated a growth of 2.2%
    for 2020, down from 4.8% originally, while the World Bank estimated Romania’s
    GDP growth to stand at 1.9% this year.




    EUROBAROMETER
    – Three quarters of young Romanians
    feel optimistic about the future of the European Union, while half of them
    believe things are headed in the right direction for the EU, according to a
    Eurobarometer published on Monday. According to the survey, young Romanians
    have greater support for European policies compared to other age categories and
    are content with their lives. Their main concerns are related to the education
    system, the economy, unemployment, housing, the environment and climate
    change.


    RWB – Romania can boast of a diverse, relatively
    pluralistic media landscape that produces hard-hitting public interest
    investigations. Pressure from owners, lack of transparency in financing or
    market difficulties, however, hamper the reliability of the information, reads
    the 2022 World Press Freedom Index released by Reporters without Borders.
    Romania ranks 56th, down by 8 positions compared to the previous
    year. Norway remains top of the world press freedom index for the sixth
    consecutive year, followed by Denmark and Sweden. The lowest-placed countries
    in terms of press freedom are China, Myanmar, Turkmenistan, Iran, Eritrea and
    North Korea. In a message released today to mark World Press Freedom Day,
    Romania’s Prime Minister, Nicolae Ciucă, expressed
    confidence there is no democracy without press freedom, whereas journalists
    should be allowed to do their job.


    COLECTIV – The Bucharest Court of Appeal earlier today
    postponed for the fifth time a final sentence in the court case investigating
    the Colectiv nightclub fire of October 30, 2015, when 64 people were killed and
    another 200 were injured. During a rock concert hosted by the club that night,
    the pyrotechnics show ignited the foam covering the ceiling and walls of the
    overcrowded venue. Part of the people were killed on the spot, while other died
    to the burns, the deadly mix of fumes or in the stampede near the exit. The
    court of first instance handed down sentences between 3 and 11 years in prison
    to district 4 mayor at the time, Cristian Popescu Piedone, cityhall workers,
    club owners, firefighters, pyrotechnicians as well as representatives of the
    pyrotechnics company.


    CCR – The Chamber of Deputies and the Senate are today
    convening in a joint plenary sitting to appoint two new Constitutional Court
    (CCR) judges, one of them expected to replace the current president of CCR,
    Valer Dorneanu. The mandates of the two judges expire in June, and under the
    law, the new judges must be designated at least a month in advance. CCR
    comprises nine judges, appointed for a mandate of nine years. Of these, three
    are appointed by the Chamber of Deputies, three by the Senate and three by the
    president of Romania. The Court replaces a third of its judges every three
    years.


    GOPO AWARDS – A new Gopo Awards Gala will take place this evening
    in Bucharest, celebrating the best-performing cinema projects in the last year.
    Some 900 guests are expected to attend. 19 features launched in cinemas or
    streaming platforms in 2021 have been nominated in 20 categories. This year’s
    edition also celebrates solidarity. Film enthusiasts from around the world are
    invited to take part in a fund-raising campaign titled United through Film.
    All proceeds will go to Ukrainian filmmakers with the help of the International
    Coalition for Filmmakers at Risk. (VP)



  • European Commission releases 2020 Winter Forecast for Romania

    European Commission releases 2020 Winter Forecast for Romania

    Romania reported an economic growth
    of 3.9% in 2019, compared to 4.4% in 2018, the European Commission winter
    economic forecast shows. Published on Thursday, the report reveals that
    Romania’s economic growth will continue to ease in 2020 and 2021. Compared to
    the previous forecast published in November, the European Commission has
    revised slightly upwards its economic forecast for Romania, considering that
    last autumn the estimated economic growth for 2020 was 3.6% and 3.3% for 2021.
    Right now, the Commission estimates a growth of 3.8% this year and 3.5% next
    year. Of the 27 Member States, only Malta will report an economic growth above
    Romania. The Commission recalls that real GDP growth declined from a
    post-crisis peak of 7.1%


    in 2017 to 4.4% in 2018 and is
    expected to have moderated to 3.9% in 2019. Real GDP growth is forecast to
    remain robust this year and the next, while the significant fiscal stimulus
    planned in 2020 and 2021 is expected to give a new boost to private consumption
    while also stimulating imports, the Commission also says. Investment is
    expected to remain strong in 2020, supported by construction and greater use of
    EU investment funds. The reversal in early 2020 of measures introduced in
    December 2018 concerning the taxation of the banking and energy sectors is
    expected to favor private investment, the Commission further notes. At the same
    time, the European Commission estimates inflation to continue to shrink in
    Romania, from an average of 3.9% in 2019 to 3.4% in 2020 and 3.3% in 2021. The
    European Commission warns that the fiscal policy stance will be a key
    determinant of the evolution of economic growth in 2020 and 2021. A
    continuation of expansionary fiscal policies aggravating existing macroeconomic
    imbalances could affect investors’ confidence and lead to higher funding costs.
    Conversely, the start of much needed fiscal consolidation would contribute to the
    unwinding of the accumulated imbalances but would also result in somewhat lower
    economic growth over the forecast horizon, the winter forecast for Romania also
    reads. More legislative unpredictability or rapidly deteriorating fiscal
    deficit could also affect the business environment in Romania and have a
    detrimental effect on investment decisions. As regards the Eurozone and the
    European Union, the Commission announced Eurozone’s GDP growth is bound to
    remain stable at 1.2%, both in 2020 and 2021. Over the same interval, the EU’s
    growth is estimated to slow down slightly to 1.4%.


    (Translated by V. Palcu)

  • Romania’s economy, assessments and forecasts

    Romania’s economy, assessments and forecasts

    In the spring economic outlook made public on Thursday, the European Commission maintains Romania’s estimated growth rate at 4.5%, which it describes as “robust”, and forecasts the GDP will increase by 3.9% in 2019. This is a lucid analysis, coming from outside the country, says economic expert Constantin Rudniţchi, who explains:



    “What we can notice in Romania’s case is that economic growth is further reported at a fast pace, but, a decrease is estimated, on the other hand, so attention should be paid to the issue. Whether we registered a 7% economic growth rate last year, the forecast for this year is 4.5% and the outlook for 2019 is 3.9%. Once more, these are good figures, but there is an overall downward trend, as lower figures are being reported.”



    The European Commission also notes that Romania’s budget deficit will stand at 3.4% of the GDP in 2018 and will increase to 3.8% in 2019, mostly because of the pay rises in the public sector. Here is Constantin Rudniţchi again:



    “The European Commission’s forecast shows that there are doubts on Romania’s maintaining its budget deficit at this level. I would like to mention here the fact that last year, too, experts believed Romania’s budget deficit would deepen, but in the end the line authorities, managed to keep it at 3% of the GDP. It is true, however, that public investments were cut, as figures show it clearly. I am afraid that this year, too, part of the public investment will be slashed in order to keep the budget deficit within the limits stipulated by the Maastricht Treaty, which means that the Romanian economy is currently channelling larger amounts of money for salaries and less for investments.”



    As regards the inflation rate, the European Commission estimates that it will continue to follow an upward trend, although figures will no longer be that high in 2019. The favourite topic of discussions over the past few months, particularly during domestic political rows, the growing inflation rate has however some external causes behind it, which have nothing to do with the Government’s and the central bank’s actions. This is the opinion shared by the leader of the ruling Social Democratic Party, Liviu Dragnea, who on Thursday attended a meeting with Prime Minister Viorica Dăncilă and the governor of the National Bank of Romania, Mugur Isărescu. Liviu Dragnea:



    “Both the Government and the National Bank have agreed that the inflation rate has gone up during this period of time due to external factors. We are referring to factors from outside the Government and the National Bank- and I can give you some examples: natural gas, energy, oil- which have a huge impact on the inflation rate and which can’t be managed by the Government or the National Bank.”



    Liviu Dragnea has said that big infrastructure projects will be started in Romania in the second half of 2019.


    (Translated by D. Vijeu)

  • November 8, 2017

    November 8, 2017

    AMENDMENTS – The Romanian Government is today expected to adopt a series of amendments to the Fiscal Code, providing, among other things, for the full transfer of social contributions from employers to employees, a cut from 16 to 10% in the tax on income, pensions, farming-related revenues, interest rates and rent. The Governments economic session has been so far postponed twice. The ruling coalition pointed out the new measures are bound to produce positive effects, amidst fears voiced by employers, trade unions and part of civil society. The biggest trade union confederations have announced protests would continue at national level. On Sunday some 20,000 people protested the Governments measures, while yesterday saw a big protest at Dacias manufacturing plant in Mioveni, southern Romania. The new fiscal measures have been harshly criticized by the president and the right-wing opposition.



    NATO – Romanias Defense Minister Mihai Fifor is starting today taking part in a two-day meeting of NATO Defense Ministers. According to Mihai Fifor, the meeting represents a new opportunity for Romania to foster its security interests in the Black Sea region and consolidate the Alliances contribution to securing its eastern flank. The main topics on the agenda for talks are the reform of NATOs command structure, the mobility of NATO troops deployed in Europe, the developments in Afghanistan, as well as North Koreas missile and nuclear programmes. Mihai Fifor will also attend the Anti-DAESH Global Coalition meeting, held on the sidelines of the NATO meeting. He will meet with US Defense Secretary James Mattis and counterparts from Great Britain, France, Portugal, Turkey and Italy, as well as with General Curtis M. Scaparrotti, Supreme Allied Commander Europe.



    EBRD – Romanias economy could report a 5.3% economic growth, which is estimated to go down to 4.2% in 2018, reads the latest forecast issued by the European Bank for Reconstruction and Development (EBRD). Previous estimates pointed to a 4% growth for 2017 and 3.5% for 2018. The National Forecast Committee last week also revised its economic growth forecast to 6.1% in 2017 as compared to the previous estimate of 5.6%. In October the IMF upgraded its economic growth forecast for Romania from 4.2% to 5.5%.



    THE KING – King Mihai I of Romania is in grave condition at his house in Switzerland, which is why no event will be held to mark his name day on the feast day of Saint Archangels Michael and Gabriel. On Tuesday Mihai was administered the Holy Eucharist, after on Monday the Royal House announced his condition had taken a turn for the worse. Aged 96, the King is suffering from two forms of cancer. Ascended to the throne in 1940, Mihai I was forced to step down and go into exile in 1947 by the new communist authorities. Mihai I returned to Romania only after the anti-communist revolution of 1989, when he regained Romanian citizenship and part of the estates seized by communist authorities.



    ENERGY – Romania has stepped up its negotiations with China with a view to building reactors 3 and 4 at the Cernavoda nuclear power plant and a new black coal unit at the Rovinari thermal power plant, Energy Minister Toma Petcu said on the sidelines of a ministerial conference held in Bucharest, attended by a Chinese delegation. In turn, Foreign Minister Teodor Melescanu expressed Romanias interest to taking part in projects fostered as part of the new “Silk Road project in China. Melescanu highlighted Romanias strengths in this respect, its geographic position and its transport facilities, the port of Constanta, the Danube and the Danube-Black Sea canal.



    THE POPE – Pope Francis today accepted an invitation to become honorary member of the Romanian Academy, extended by an official delegation of the Academy at the Vatican today. The Pope accepted the distinction, underlying his “friendly relations with Romania. The award will be sent to the Holy See by the Apostolic Nunciature in Bucharest. Pope Francis is the second pope to be named honorary member of the Romanian Academy after John Paul II, who became a member in 2001.



    EUROSTAT – 25.8% of Romanias population was employed in agriculture in 2015, placing the country on the top position at EU level, against a community average of 4.4%, reads the latest report made public by Eurostat. In 2015 some 10 million EU citizens worked in agriculture, of which 7.5 in Romania, Poland, Italy, France, Spain, Bulgaria and Germany. According to Eurostat, the rate of completing higher education studies varies between 1.6% in Romania and 25% in the UK amongst agriculture workers. Finally, Romania has the lowest rate at EU level, 1.5%, in terms of full-time agriculture workers, as compared to the EU average of 16.4%.



    MOLDOVA – EU Commissioner for Trade Cecilia Malmstrom spoke about the unused potential of Moldovas free trade agreement with the EU, despite offering many benefits to the Republic of Moldova. The EU official is on a visit to Chisinau to mark three years since the agreement was ratified. Cecilia Malmstrom said Moldovan authorities must carry out additional reforms to step up trade relations with the Union. The EU official went on to say that Moldovas implementation of the memorandum signed with the IMF is a prerequisite to the EUs € 100 million financial package to this country. According to statistics, Moldovas exports to the EU exceeded $ 1 billion in the first nine months of the year, up by 16% as compared to the same period last year.



    TOUR – As of today US president Donald Trump is on a three-day visit to China, an important stop part of his tour of Asia. According to international news agencies, the White House leader will meet his counterpart Xi Jinping against the backdrop of US efforts to reconstruct a single frontline against North Koreas nuclear programme. Trump will call on China to break all trade relations with North Korea and get in line with UN sanctions against Pyongyang. During his tour of Asia, President Trump has visited Japan and South Korea, and will next travel to Vietnam and the Philippines.



    FOOTBALL – On Thursday Romanias national football team is playing Turkey at home in Cluj Napoca, central Romania, and will next play the Netherlands on November 14. Both games are friendly. Coach Cosmin Contra has called up 30 players, of whom 17 play for clubs abroad. The two games are bound to prepare preparations for the 2020 European Cup preliminaries. Romania failed to qualify to the 2018 World Cup to be hosted by Russia, after a subpar campaign with German Christoph Daum at its helm. We recall Romanian Mircea Lucescu is currently Turkeys headcoach. (Translated by V. Palcu)

  • Romania’s Budget Deficit

    Romania’s Budget Deficit

    In 2016, Romania’s budget deficit accounted for 3% of the GDP, the Statistical Office of the European Union, Eurostat, announced on Monday. Romania’s GDP stood at around 170 billion euros last year while the deficit exceeded 5 billion euros, although the country pledged to keep its budget deficit below 3%, a threshold above which the European Commission is entitled to trigger the excessive deficit procedure. We remind you that Romania’s former Government, headed by Dacian Ciolos, set the budget deficit target at 2.95% of the GDP in 2016. Only three EU countries had a budget deficit of 3% or more, namely the UK (3%), France (3.4%) and Spain (4.5%). The EU’s budget deficit last year stood at 1.7% of the GDP.



    According to the Eurostat, at the end of 2016 Romania was among the EU member states with the lowest level of Government debt to GDP, 37.6%, way below the 60% limit set by the Maastricht Treaty and one of the criteria for joining the Eurozone. The lowest level of Government debt was reported by Estonia, with 9.5%, followed by Luxembourg, Bulgaria and the Czech Republic. At EU level, 16 member states had a debt level that exceeded 60% of the GDP in 2016.



    The European Commission warned Romania in its winter economic forecast that it might have the highest budget deficit in the EU in spite of the fact that it reported the highest economic growth in Europe last year. The Commission estimated that Romania’s budget deficit might go up to 3.6% of the GDP this year, thus exceeding the Government’s forecast of 2.98% of the GDP. The Bucharest Government, headed by Sorin Grindeanu, has publicly committed itself to keeping the budget deficit below the 3% threshold.



    The European Commission has also forecast that Romania’s economic growth this year will stand at 4.4%, below the estimated 5.2% on which the Government based the 2017 budget. According to economic analysts, the only hope for the country’s 2017 budget is an increase in the number of employees, that would provide a “reserve” of revenues by curbing black market labour and by increasing the number of legal workers. Recent statistics show that Romania’s active population accounts for 8.9 million, of whom only 4.78 million are working legally, while 1.5 million are illegal workers. (Translated by E. Enache)

  • The winter economic forecast of the European Commission

    The winter economic forecast of the European Commission

    Awaited with interest, the winter forecast of the European Commission has brought good news for the first time in the last nine years, saying that all EU economies will grow during the period under scrutiny, that is 2016-2018. According to estimates, even the European countries deeply hit by economic downturn will register economic growth, while unemployment will go down to the lowest rates after the 2008 economic crisis.



    The forecast says that in the Eurozone the GDP has been growing for 15 quarters in a row. Employment is on the rise at an encouraging pace and unemployment keeps plummeting. Private consumption continues to be the engine of recovery and investments keep growing, at a modest pace though. Those prospects are however overshadowed by an uncommonly greater uncertainty triggered by the new US administration, the future elections in certain European countries, as well as by Brexit. According to the European Commissions forecast, the economic growth rate in Romania is one of the highest in the European Union and it is estimated to stay that way until 2018, being backed by fiscal relaxation and pay rises. However, figures are fairly lower than the ones considered in drafting the budget and experts say that there is the danger of the budget deficit target being exceeded. Economic analyst Aurelian Dochia:



    “For a few months now, the European economy has been showing signs of recovery. It is obvious that at the level of the European economy, Romania ranks among the countries with the highest economic growth rate. The European Commission predicts that in 2017, the growth rate of Romanias GDP will be 4.4%; although it is a very high rate in the European Union, it is lower than the governments forecast and the figures underlying the budget, which has recently been debated by Parliament. That obviously questions the way in which 2017 is going to end. If the economic growth rate is going to be below the 5.2% rate forecast by the government, it means that the budget revenues will be much lower than expected.



    Senate Speaker Calin Popescu-Tariceanu said on Monday after the winter economic forecast of the European Commission had been made public that Romanias budget deficit in 2017 would be higher than in 2016 but that it would not exceed 3%. (Translated by A.M. Palcu)

  • February 13, 2017 UPDATE

    February 13, 2017 UPDATE

    FORECAST — The European Commission on Monday upgraded its economic growth forecast for Romania in 2017 to 4.4%, with an estimated slowdown in 2018 to 3.7%. Last autumn, the Commission estimated economic growth to stand at 3.9% in 2017 and at 3.6% in 2018. On the other hand, the Commission expects all EU economic to grow over the next two years for the first time in nine years, although has warned against the high level of uncertainty underlying the forecast, also tied to the new administration in the United States, the upcoming elections in some EU states and Brexit.



    REFERENDUM — Parliament on Monday greenlighted the President’s request to hold a referendum on the fight against corruption. The vote was unanimous. On January 24, President Iohannis launched proceedings to hold a referendum, leaving Parliament 20 days to issue a consultative opinion. If the deadline was not met, the President could set a referendum anyways. Under the law, the president must set a date and decide on the question the people will be summoned to answer.



    MEETING — President Klaus Iohannis has sent a letter to Prime Minister Sorin Grindeanu calling a meeting on Tuesday with respect to the draft budget for 2017 and the draft social security budget. Talks will also be attended by Finance Minister Viorel Stefan. The president is expected to sign the two bills voted by Parliament into law. Prior to the vote in Parliament, the president had voiced concern that the budget deficit might exceed the limit of 3% imposed by the EU, saying that the economic growth forecast underlying the budget is much too optimistic. Also, the president wants 2% of the GDP to be allotted to defence, in line with Romania’s commitments at NATO level.



    ENERGY — Romania will have to rely on imports to secure its power consumption, reads a release of Romania’s main electricity supplier Transelectrica. The biting cold this month has got up energy consumption to historic highs, both in terms of electricity and natural gas. On Monday morning Romania’s electricity output of 8,600 was lower than the 9,100-megawat demand. The difference was covered by imports from Ukraine, Hungary and Serbia. In turn, the Energy Ministry claims Romania has no trouble in covering the demand from internal production, while Monday’s imports were to the benefit of the end user.



    INVESTIGATION — Romania’s Prosecutor General’s Office on Monday called on the National Integrity Agency to check the financial statements of Romania’s former president Traian Basescu. The request comes as the money laundering investigation involving Traian Basescu was closed. The decision was taken as there was no evidence attesting to a criminal offence that led to the money laundering. Still, prosecutors have launched another investigation regarding forgery of official statements and has called on the Agency to check the former president’s financial statements filed in 2000.



    STATISTICS — Romania has one of the lowest national minimum wages at EU level, standing at 322 euros after the salary increase operated as of February 1, second-last ahead of Bulgaria, where the national minimum wage stands at 235 euros. In January 2017, ten EU member states from Eastern Europe had minimum wages below 500 euros — Bulgaria, Romania, Latvia, Lithuania, the Czech Republic, Hungary, Croatia, Slovakia, Poland and Estonia. According to Eurostat, the national minimum wage exceeds 1,000 euros in Great Britain, France, Germany, Belgium, the Netherlands, Ireland and Luxembourg.



    MOLDOVA — Ukraine might resume its electricity exports to Moldova, while new border crossing points might be opened on the Moldovan-Ukrainian border. The decision was taken during talks held in Kiev between Moldovan Prime Minister Pavel Filip, his Ukrainian counterpart Volodimir Groisman and Ukrainian President Petro Poroshenko. The agenda for talks included the Transdniestr issue, defining borders and the mutual recognition of properties. The two Prime Ministers also signed a roadmap for developing Moldovan-Ukrainian cooperation in 2017. (Translated by V. Palcu)