Radio România Internațional

Tag: economy

  • March 7, 2025

    March 7, 2025

    EU The European Union has put together an arms plan agreed on Thursday evening by the leaders of the member states. The plan will prioritise strengthening defence on the eastern flank, from the Baltic Sea to the Black Sea, to withstand Russia’s expansionist tendencies. European leaders have once again expressed their support for Ukraine and for providing security guarantees, together with the United States, if a ceasefire is agreed. Member states will have a fund of EUR 150 billion available for defence spending. The priorities are air and missile defence systems, artillery, high-precision strike systems, drones and anti-drone systems, various types of ammunition and AI technology. The Baltic states, Poland and Romania have garnered support for their view of prioritising the eastern flank in terms of EU-funded projects.

     

    TREASON The Bucharest Court of Appeals last night ordered that 2 members of the so-called “Vlad Ţepeş” Command be placed under pre-trial arrest. They are charged with treason and ties to Russian agents. Four other members of the organisation are under court supervision for a period of 60 days. Radu Theodoru, a retired major general, aged 101, is also being investigated as a suspect in the case. According to the Directorate Investigating Organised Crime and Terrorism Offences, the group aimed to replace the constitutional order and pull Romania out of NATO.

     

    ELECTIONS The non-affiliated mayor of Bucharest, Nicuşor Dan, has today submitted his candidacy and list of support signatures for the presidential elections in May to the Central Electoral Bureau. The independent candidate Călin Georgescu, backed in the presidential race by AUR and POT parties (in opposition), will also register his candidacy today. On Sunday, the former Liberal leader Crin Antonescu, backed by the ruling coalition’s electoral alliance, “Romania Forward”, is expected to arrive at the BEC headquarters. Another competitor is the former Social-Democratic prime minister Victor Ponta, who announced that he will run as an independent and that he will register his candidacy next week. Prospective presidential candidates have one week left to register with the Central Electoral Bureau (BEC), as the registration deadline is March 15. Candidates must submit lists with at least 200,000 supporter signatures.

     

    ECONOMY Romania’s economy grew by 0.9% last year, and in the last quarter of 2024 the GDP rose by 0.7% compared to the corresponding quarter of 2023 and by 0.8% compared to the third quarter of 2024, according to unaudited data released on Friday by the National Statistics Institute (INS). The 2.9% drop in net exports, a result of the 3.6% decrease in exports of goods and services concurrently with a 3.4% increase in imports, had a negative impact on GDP growth.

     

    PROTEST Trade unionists at the Damen Shipyard, operated by a Dutch company in the south-eastern Romanian town of Mangalia, jointly with employees who have been laid off or idled, today picketed the Dutch Embassy and the headquarters of the administrator in Bucharest. The announcement was made by the “Navalistul” Union, which said in a statement that the action aims to warn against the major crisis the shipyard is facing. According to the source, there is a risk that the shipyard will be closed, which will affect the entire local community.

     

    SPORTS Romania’s champions CS Dinamo Bucharest defeated the Danish side Fredericia HK, 37-32 on Thursday evening in Odense in its last match in Group A of the men’s handball Champions League. Dinamo, which had already qualified for the play-offs, finished the group in fifth place and will face the German team SC Magdeburg in their effort to qualify into the quarter-finals. In football, Romanian champions FCSB were defeated at home by the French team Olympique Lyon, 3-1, in the first leg of the Europa League round of 16. The decisive leg will be played next week in France. (AMP)

  • Economic Forecasts for Romania

    Economic Forecasts for Romania

     

    Romania no longer leads the EU ranking in terms of the highest average annual inflation rate, but remains among the top 3 countries, the EU Statistics Office reports.

     

    After 10 months of unwanted leadership of this ranking for our country, in January 2025 Hungary climbed to first place, with 5.7%, followed by Romania, with 5.3% and Croatia, with 5 percent.

     

    The average rate of consumer price increase is calculated over the last 12 months, and in this case it compares the figures reported in February 2024 – January 2025 with the period February 2023 – January 2024.

     

    In the European Union, this indicator reached 2.8% last month, from 2.7% in December 2024, while in the Eurozone it rose to 2.5% in January, from 2.4% in December. The European Central Bank has set a 2% inflation target, which it views as healthy for economic growth in the EU.

     

    In Romania, according to data released by the National Statistics Institute, the year-on-year inflation rate dropped from 5.14% in December to 4.95% in January 2025, as food prices rose by 4.54%, non-food prices by 4.60%, and prices for services by 6.54%.

     

    Last week, the National Bank of Romania adjusted the inflation forecast for the end of this year from 3.5% to 3.8%. The Governor of the National Bank of Romania, Mugur Isărescu, said that inflation would be fluctuating in the first half of this year, then it would stay on a slight downward trend, but it would not fall below 3.5% until the first quarter of 2026. He expects Romania to see a period of lower deficit, which is good for inflation, but could affect economic growth:

     

    Mugur Isărescu: “The country enters a period of decreased demand, so let’s see how it works. The important thing is for this new situation, combined with the fiscal policy, the monetary policy, not to lead to recession. If economic growth is based mainly on investments and especially on EU fund absorption, we believe this can be avoided and we can have decreasing inflation. We are talking about economic growth—not great, but growth nonetheless.”

     

    The central bank governor also explained that in the future as well, inflation remains marked by risks and uncertainties, both domestic and foreign. Among the domestic elements affecting inflation, Isărescu listed the electoral year marked by political and social tensions, while for external elements he mentioned a possible trade war between the United States of America and the European Union, which he said could have significant negative effects on Romania.

     

    In this context, Mugur Isărescu appreciated the decision of the Romanian government to declare the absorption of EU funds as a top priority, and emphasised that revitalising investments is important. For the end of 2026, the central bank of Romania predicts a 3.1% annual inflation rate. (AMP)

  • The Conclusions of the IMF and World Bank missions

    The Conclusions of the IMF and World Bank missions

    The delegations of the International Monetary Fund and the World Bank have concluded their talks in Bucharest with the representatives of the main bodies in charge of Romania’s monetary and fiscal policies. The IMF team met the representatives of the government and the National Bank to assess the latest financial and economic developments and update their macroeconomic forecasts. At the moment, Romania has no ongoing funding agreement with the IMF, but the Fund conducts annual assessments of the performance of the Romanian economy based on consultations on Article IV.

    Prime minister Marcel Ciolacu conveyed to the IMF experts his government’s commitment to stay within the budget deficit target of 7% of GDP and to implement the reforms undertaken under the National Recovery and Resilience Plan. The prime minister highlighted the measures aimed at the reduction of personnel spending, restructuring of the public sector and the administrative and territorial reorganisation, which are a priority in the coming period.

    During the talks with the IMF mission, finance minister Tánczos Barna reiterated the government’s commitment to reduce the budget deficit and create a leaner state in the next seven years, while boosting allocations for investments that support the economy. He said a series of measures need to be taken to gradually restore the budget deficit balance and prevent an economic crisis similar to that of 2009.

    The International Monetary Fund published the latest forecasts with regard to the performance of the Romanian economy in the autumn of 2024, estimating a 7% deficit for the end of 2025, the same level as that forecast by the Romanian government. The Fund’s expectations are, however, slightly more optimistic with respect to economic growth, putting it at 3.3%, compared with the government’s forecast of 2.5%, as well as with respect to inflation, which it expects to hit 3.6%, below the government’s estimate of 4.4%.

    The representatives of the World Bank welcomed the government’s reform plan and the attention given to investments, saying Romania is a strong and resilient partner. For a better management of joint projects, the two parties agreed on a working mechanism with frequent meetings over the coming period. The group’s executive director, Eugene Rhuggenaath, said the World Bank would expand its investments in Romania to energy, the green transition, infrastructure and other areas with a growth potential. The Bank’s officials also hailed Romania’s support for the Republic of Moldova and Ukraine, as well as its contribution to ensuring stability in the region.

    Prime minister Marcel Ciolacu said the authorities will continue to support the development of infrastructure and the agricultural, industrial and building sectors. Also, they will go ahead with the projects to improve medical care and energy services.

  • February 4, 2025 UPDATE 2

    February 4, 2025 UPDATE 2

    BUDGET In Bucharest, the draft law on the 2025 state budget and social security budget were discussed in Parliament’s specialist committees on Tuesday. On Wednesday, the Senate and the Chamber of Deputies will meet in a plenary session to review the two bills, and the final vote is scheduled for Thursday. The discussions and the vote in Parliament are predictable, as the MPs of the ruling coalition (PSD-PNL-UDMR) have a majority. The draft budget for this year, based on a 2.5% economic growth rate and a budget deficit of 7% of GDP, was passed by the Cabinet on Saturday. ‘It is a restrained budget, based on a prudent forecast. It is a balanced budget, and in addition to investments, we have enough funds to pay salaries and pensions,’ the finance minister Tanczos Barna said.

     

    ECONOMY Romania is ‘a politically and economically stable and safe country,’ oriented towards investment and reform, Prime Minister Marcel Ciolacu said on Tuesday at a meeting with World Bank officials in Bucharest. ‘Our country is a regional pillar of security and economic stability for Europe and for the Strategic Partnership with the US,’ the PM added. According to a news release issued by the government, Bucharest sees the WB as a partner for its goals and continues to rely on the funding and know-how provided by the group. During the meeting, the participants reviewed jointly-developed projects in the fields of healthcare and emergency management. The World Bank officials welcomed the Government’s reform plan and the attention paid to investments, noting that Romania is a strong and resilient partner. I am confident that together we will continue to implement the ongoing projects and expand the portfolio with new investments in energy, green transition, infrastructure and other areas with growth potential, WB executive director Eugene Rhuggenaath said. The institution’s representatives also appreciated the support offered by Romania to the neighboring Republic of Moldova and Ukraine, as well as its contribution to ensuring stability in the region.

     

    MEETING At a meeting on Tuesday with the European Commission executive vice-president in charge of social rights and skills, quality jobs and training, Roxana Mînzatu, President Klaus Iohannis emphasised the critical role of education in fighting disinformation and manipulation, as well as in strengthening the democratic resilience of European societies. According to a news release issued by the Presidency, the topics on the agenda included the social dimension of European Union policies, ways to increase the EU’s global competitiveness, the Union’s strategy with respect to preparedness and resilience in the face of challenges, EU approaches to education and the involvement of the Romanian education system in the European context. In turn, the EC executive vice-president presented the main priorities of the new Commission, including in the areas of employment, social rights and EU-funded educational programs in Romania, as well as preparedness for crisis situations. On Monday and Tuesday in Bucharest Roxana Mînzatu also had talks with PM Marcel Ciolacu, with the Senate Speaker Ilie Bolojan, and with the Chamber of Deputies Speaker, Ciprian Şerban, about key EU and national priorities, with an emphasis on education, the labor market, social cohesion and the management of European funds.

     

    CHURCH The Romanian Orthodox Church (the majority denomination in Romania) Tuesday celebrated 100 years since its promotion to the rank of Patriarchate. According to Patriarch Daniel, this anniversary is not only a celebration of the past, but also a call to gratitude towards our ancestors and a reflection on the role of our Church in the life of the Romanian people. The Romanian Patriarchate was, throughout its 100-year existence, an unquenchable torch of faith and national unity, he said. In turn, president Klaus Iohannis said the centennial of the Romanian Patriarchate is a moment of historic importance for the entire Romanian Orthodox Church and for believers in the country and in Romanian communities abroad.  According to experts, Specialists recall that the Romanian Patriarchate was born on February 4, 1925, in a historical context marked by the Great Union of 1918, which brought together all the historical Romanian provinces in a one nation state.

     

    MOLDOVA The European Union Tuesday allocated a new EUR 250 mln financial envelope to support the Republic of Moldova in 2025 in the face of Moscow’s ‘energy blackmail,’ after the halt in Russian gas supplies to the breakaway region of Transnistria, AFP reports. ‘Today we are taking an essential step to (…) help the Republic of Moldova regain control over its energy destiny,’ the EU Enlargement Commissioner Marta Kos, who is on an official visit to Chisinau, posted on a social network. In turn, the European Commission President Ursula von der Leyen denounced Moscow’s use of ‘energy to blackmail people’, promising to offer the former Soviet republic ‘full integration into the EU energy market, decoupling it from Russia ‘. After the war started in neighboring Ukraine, the Republic of Moldova says a ‘hybrid war’ is orchestrated by Russia, including the energy crisis, disinformation and electoral interference. Chisinau is facing a suspension of Gazprom supplies to Transnistria via Ukraine, after a transit agreement between Kiyv and Moscow came to an end. (AMP)

  • February 4, 2025 UPDATE

    February 4, 2025 UPDATE

    Romania is ‘a politically and economically stable and safe country,’ oriented towards investment and reform, Prime Minister Marcel Ciolacu said on Tuesday at a meeting with World Bank officials in Bucharest. ‘Our country is a regional pillar of security and economic stability for Europe and for the Strategic Partnership with the US,’ the PM added. According to a news release issued by the government, Bucharest sees the WB as a partner for its goals and continues to rely on the funding and know-how provided by the group.

     

    During the meeting, the participants reviewed jointly-developed projects in the fields of healthcare and emergency management. The World Bank officials welcomed the Government’s reform plan and the attention paid to investments, noting that Romania is a strong and resilient partner. I am confident that together we will continue to implement the ongoing projects and expand the portfolio with new investments in energy, green transition, infrastructure and other areas with growth potential, WB executive director Eugene Rhuggenaath said. The institution’s representatives also appreciated the support offered by Romania to the neighboring Republic of Moldova and Ukraine, as well as its contribution to ensuring stability in the region.

  • S&P downgrades Romania’s rating

    S&P downgrades Romania’s rating

    For Romania and its economic-financial prospects, 2025 begins in the same way as 2024 ended: Standard&Poor’s rating agency has maintained the country’s BBB- rating, the lowest investment grade category, but has revised its outlook from stable to negative. At the end of last year, Fitch also revised its outlook to negative for long-term hard currency loans, while maintaining its BBB- grade.

    Standard&Poor’s believes that that the country’s fragmented and uncertain political environment is likely to delay the new government’s fiscal consolidation agenda. The high spending made before the elections pushed the deficit to close to 8.7% of GDP, much above the agency’s expectations, which signals challenges to cost containment amid a slowing economy. The experts are also saying that the loose fiscal policies will keep the current account deficits wide and increasingly financed by debt-creating flows, potentially exposing Romania to foreign investor confidence shocks.

    In a first reaction, Romania’s finance minister Tánczos Barna said the change from stable to negative outlook shows measures are needed to cut the budget deficit, as well as a balanced budget and a slimmer state. “Romania is still recommended to investors as safe. The decisions adopted by the government to reduce the budget deficit and consolidate economic growth must be implemented at a fast pace, in the version already agreed with our European partners”, the minister posted on his Facebook page. He emphasised that this year’s budget, which will soon be submitted to Parliament for approval, strengthens this measured approach to the management of public funds. If the evolution of Romania’s economy confirms the fears of rating agencies leading to its actually losing the stable grade, this would result in higher lending costs for Romania.

    According to analysts, investors and rating agencies are still skeptical, owing to the internal political uncertainty and the delay in structural reforms. However, towards the end of 2024, the newly formed coalition government made up by the Social Democratic Party, the National Liberal Party and the Democratic Union of Ethnic Hungarians in Romania, adopted an emergency order reflecting its will to drastically cut unnecessary spending, especially in the central and local administration, in order to reduce the deficits. The government also froze salaries and pensions to prevent the budget from sliding on a dangerous path.

    The measures taken have already sparked a wave of discontent among some public sector employees, so the coalition government will be faced with a serious social test. Moreover, by a turn of events, 2025 has become an election year, just like 2024. In May, Romanian voters will again go to the ballots to elect their president, as the Constitutional Court last December annulled the presidential elections saying the election process had been corrupted.

  • January 22, 2025

    January 22, 2025

    ECONOMY The Economic and Financial Affairs Council (ECOFIN) Tuesday approved Romania’s 7-year fiscal structural plan to reduce the country’s budget deficit. The plan is designed to stabilise public debt as Romania remains among the top EU member states in terms of public investment – over 7% of GDP, bringing the budget deficit below 3% in 2025-2031, the finance minister Tánczos Barna explained. The decision comes as several countries, including France, Spain, Italy and Finland, are facing similar challenges and have requested an extension of the fiscal adjustment period from 4 to 7 years, until 2031. Other topics on the ECOFIN meeting agenda include the current impact of Russia’s aggression against Ukraine, the priorities of the Polish presidency of the EU Council, the 2025 European Semester and the endorsement of the revised recovery and resilience plans for Greece, Cyprus and Spain.

     

    POLL  90% of Romanians reject the idea of ​​leaving NATO, a record level of approval for the North Atlantic Treaty Organisation, an INSCOP survey made public on Tuesday indicates. According to the poll, based on data collected at the end of last year, Romanians’ support for the West in terms of political and military alliances has increased by 10% over the past 3 years. The poll also shows that Romania’s European Union membership is seen by almost three-quarters of respondents as an advantage in terms of its effects on economic and social life, on family and personal life. Only 55% of Romanians believed this 3 years ago.

     

    PROTEST The Bucharest metro trade unionists today carry on their protest in front of the Government headquarters, demanding respect for the employees and the collective bargaining agreement. On Tuesday, they picketed the finance ministry, demanding pay raises and proper financing for the company. Metro employees also announced work-to-rule and token strikes, against the ordinance passed by the new government at the end of last year, which no longer allows hiring, promotions and the rights negotiated in the collective bargaining agreement registered in early December 2024.

     

    EARTHQUAKES Romania will have a seismic risk map for each locality, and the authorities in high-risk areas will have access to a governmental programme to consolidate public buildings, the development minister Cseke Attila announced. He added that the programme is fully funded from the state budget and that the priority is to consolidate healthcare units. According to the latest statistics, over 2,500 buildings in Bucharest alone are in danger of collapsing in intensity 7+ earthquakes similar to the one in 1977.

     

    POLLUTION Romanian authorities are closely monitoring the situation in the Black Sea, after 2 Russian oil tankers were badly damaged in the Kerch Strait at the end of last year, causing an environmental disaster in the area. The environment minister Mircea Fechet warned that everyone must be prepared, but stressed that the risks of the pollution wave reaching the Romanian coastline are minimal. Authorities are assessing the situation, after over 2,000 tons of highly toxic oil product spilled in the sea, causing the death of thousands of birds and leaving hundreds of dolphins stranded tens of kilometres from the shore.

     

    TRUMP The US president Donald Trump said new sanctions against Russia are “possible” if Moscow does not negotiate an end to the war in Ukraine, AFP reports. He added the United States would consider continuing military aid to Kyiv, which has amounted to tens of billions of dollars since Russia invaded Ukraine in February 2022. Trump had previously said that Russia was heading for disaster if it refused to negotiate and sign a ceasefire or peace agreement with Ukraine. As for the Ukrainian president, Trump expects Zelenskyy to be willing to sign an agreement. (AMP)

  • January 21, 2025 UPDATE

    January 21, 2025 UPDATE

     

    ELECTIONS The Permanent Electoral Authority in Bucharest said political parties may begin to collect signatures for the candidates they will support in the presidential elections in May. The signatures can be collected only in physical format and a voter can support more than one candidate. The ruling coalition comprising the Social Democratic Party, the National Liberal Party and the Democratic Union of Ethnic Hungarians in Romania, is yet to kick-start the election period and to officially endorse the former Liberal leader Crin Antonescu as their joint candidate in their respective leadership bodies. The Social Democratic leaders met on Tuesday and in principle endorsed Crin Antonescu as their presidential candidate in May, and decided to hold a party congress on 2nd February to give the final vote on his candidacy.

     

    ECONOMY Romania’s fiscal structural plan has been approved by the Economic and Financial Affairs Council (ECOFIN), along with the plans of 20 other member states, the Romanian minister of investments and European projects Marcel Boloș announced on Tuesday. The decision comes as several countries, including France, Spain, Italy and Finland, are facing similar challenges and have requested an extension of the fiscal adjustment period from 4 to 7 years, until 2031. Marcel Boloș explained that for the business environment, the fiscal plan protects the flat tax rate, with the European Commission agreeing that governments should not overtax economic success. He also said that thanks to the plan, European funding is protected, because failure to comply with the fiscal treaty would have led to its suspension. On the other hand, the Romanian official also points out, this plan preserves the country’s international credibility, as non-compliance with fiscal commitments would have led to a decrease in the country’s rating, which would have made loans more expensive and more difficult to access. The plan also secures support for investments, including for SMEs in Romania through state aid schemes for small and medium-sized enterprises operating especially in the manufacturing sector, which will create new jobs and stimulate economic growth.

     

    EUFOR The Romanian defence ministry announced on Tuesday that Romania has taken over the command of the European Union Force in Bosnia and Herzegovina (EUFOR). With the command of EUFOR, the largest multinational operation in the Western Balkans conducted under the Common Security and Defense Policy (CSDP), Romania currently exercises command of 2 of the 9 military operations and missions under the flag of the European Union, to which it contributes troops and military equipment, the same source mentions. After Brigadier General Ovidiu Lungu successfully completed his term as Chief of Staff of EUFOR ALTHEA between May 2023 and May 2024, the Romanian Army increased its representation within the operation by taking over the leadership of the most important multinational force in the Western Balkans. The stability of the region is a priority for Romania, and it has strategic importance for European and Euro-Atlantic security, the defence ministry points out.

     

    CONGRATULATIONS Romania’s acting president Klaus Iohannis has congratulated the new White House leader Donald Trump on his investiture. “Romania, a close strategic partner of the US, wishes you the best of success for this important new mandate. We need a strong and vibrant transatlantic link, to the benefit of our joint EU-US security and prosperity”, president Iohannis posted on social media. The leaders of Romania’s biggest parties also congratulated Donald Trump on the inauguration of his second term in office on Monday.

     

    DONALD TRUMP A few hours after taking office, Donald Trump pulled the US out of the World Health Organisation and the Paris Agreement on climate. He also signed an executive order on an Organisation for Economic Cooperation and Development global tax arrangement and asked the Department of Energy to resume processing export applications for liquefied natural gas. He declared an energy emergency in the US and revoked a number of orders introduced by the Biden administration, including one on the risks of artificial intelligence. Trump also lifted the sanctions imposed by Biden on the Jewish settlers who committed violence against the Palestinians in the West Bank. He instructed the Justice Department to dismiss the cases connected to the attack on the Capitol, pardoned 1,500 of his supporters who took the building by storm in 2021, and reduced and commuted the sentences of others. Trump declared the illegal immigration on the border with Mexico as a national emergency and the drug cartels as terrorist organisations, and signed a document affecting the granting of birth-right citizenship. Donald Trump also suspended refugee programmes for 4 months, which led to the cancellation of flights to the US for over 1,600 Afghans, including relatives of US soldiers.

     

    FESTIVAL The 27th edition of the George Enescu International Festival will place special emphasis on cultural events and concerts all across Romania and for all Romanians to enjoy, the festival’s artistic director, the Romanian conductor Cristian Măcelaru told a press conference on Monday in Bucharest. He said this year’s edition will see a number of special events, including the commemoration of 70 years since the death of George Enescu. The festival will take place between 24th August and 21st September and will feature 80 symphonic, chamber, choir and instrumental ensemble performances from 28 different countries.

  • World Bank revises downward Romania’s outlook

    World Bank revises downward Romania’s outlook

    Romania’s economic growth rate will slow down in 2025, according to the World Bank.

     

    The Romanian economy will register an advance of only 2.1% this year, compared to a level of 3.8% estimated in the middle of last year, according to the World Bank’s “Global Economic Prospects” report , made public recently. The institution’s forecast for next year is also revised downwards, from 3.8% to 2.6%. According to the World Bank, growth in Central Europe is forecast to rebound to 2.8% in 2025 and 3% in 2026, driven by robust private demand.  However, export  from Central Europe is expected to remain modest due to subdued growth in the euro area.

     

    Investment, particularly in Poland and Romania, is projected to gain traction from structural reforms and delayed EU funding, experts of the international institution say. These countries have disbursed 19% and 33%, respectively, of their Recovery and Resilience Facility allocations, with approximately 13% of milestones achieved and positively assessed, the report shows. Despite the inflow EU funding, recently announced fiscal consolidation measures have contributed to notable downward revisions to Romania’s outlook since June.

     

    At the beginning of February, an IMF mission will travel to Bucharest, for meetings with representatives of the new Romanian Government and the National Bank. The visit aims to analyze recent economic and financial developments and update the macroeconomic outlook. At the end of last year, Fitch rating agency revised downwards its outlook for Romania’s GDP growth for 2025 and 2026, to 1.4% and 2.2% respectively, given a less pronounced recovery in the euro area. In fact, the World Bank forecasts that, in the euro area, GDP would grow by only 1% in 2025, after estimating an advance of 1.4% in June.

     

    The worsening prospects come against the backdrop of reduced consumption, low corporate investments and weak industrial development. The World Bank draws attention to the effects that the problems facing Germany, which is responsible for almost 30% of the euro area’s GDP, may have. In addition, the World Bank warned that potential additional 10% tariffs by the United States could decrease the already fragile global economic growth by 0.3% if the US trading partners impose their own tariffs. The potential additional tariffs would shrink US economic growth by 0.9%, estimated at 2.3% in 2025. Foreign direct investment in developing countries is now half their level in 2000, and global trade restrictions are five times higher than the average in 2010-2019, the World Bank reports.

     

  • January 19, 2025 UPDATE

    January 19, 2025 UPDATE

    GAZA The Israeli government has nominated 33 hostages to be released by the Palestinian Islamist movement Hamas, during the first phase of the ceasefire agreement that has taken effect. In a first phase, on Sunday, three women were released, including one of Romanian descent and one with dual Israeli and Romanian citizenship. Romania welcomes the release of the first group of hostages, including a Romanian citizen and a person of Romanian descent, President Klaus Iohannis said. ‘We thank all our partners for their support and call for a continued implementation of the agreement and for the return of the remaining hostages to their families,’ the head of state said. Israel’s minister of national security Itamar Ben-Gvir has resigned in protest of the ceasefire between Israel and Hamas, Israeli media report. Ben-Gvir’s far-right and ultranationalist party will leave the governing coalition. After months of deadlock in the 15-month war in Gaza, a three-stage agreement was reached earlier this week. During an initial six-week ceasefire, 33 Israeli hostages held in Gaza are to be released in exchange for 1,904 Palestinians held in Israeli prisons, while the Israeli army is to pull out of densely populated areas in Gaza. Some 1,200 people were killed and more than 250 were taken hostage during the unprecedented terrorist attack by Hamas commandos on October 7, 2023 in southern Israel. The Israeli army responded with a large-scale ground offensive followed by air strikes on Hamas positions in the Gaza Strip, an operation that resulted in more than 46,000 casualties, according to Palestinian authorities.

     

    UNIONS Romanian trade unionists ask the politicians in power to talk directly with the people, because social tensions are high, and the powder keg could explode at any moment. This warning was issued by the Cartel Alfa federation in a statement that says political decision-makers have abandoned open communication with Romanians. The budget deficit must be corrected by improving collection, but the government refuses to take any measures outside of recipes that have proven ineffective for years, Cartel Alfa also says.

     

    JOBS Nearly 33,000 positions are declared vacant by employers in Romania, the National Employment Agency announced. Most of them, over 20,000, are intended for unskilled applicants, another 10,000 jobs require high school, post-secondary school or vocational education, and a little over 1,900 jobs require a degree, including positions as engineers in various sectors, computer programmers, financial and accounting experts or veterinarians. Also, employers from the European Economic Area offer employment through the EURES Romania network; 100 jobs are available in Germany and Spain, and another 27in Austria, Ireland and Malta.

     

    ECONOMY The World Bank has revised downward its outlook for the Romanian economy this year, mainly due to the fiscal consolidation measures recently announced by the government. In its latest global economic outlook report, the World Bank lowers its estimate for Romania’s economic growth rate to 2.1% this year, as against 3.8% forecast in June 2024. Also, in 2026, Romania’s GDP growth is expected to be 2.6% compared to 3.8%, as estimated in June. On the other hand, economic growth in Central Europe is expected to recover to 2.8% in 2025 and 3% in 2026, thanks to robust private demand. Export growth in Central Europe is expected to remain modest due to slow progress in the euro area. The level of investments, especially in Poland and Romania, is expected to improve, thanks to structural reforms and EU funding.

     

    TRADE FAIR Romania takes part in the “Green Week” exhibition in Berlin, the agriculture ministry announced. Until January 26, the national stand presents samples of Romanian products registered or in the process of being registered in European quality systems, meat preparations and cheese varieties, canned vegetables and fruits, bakery products, honey and cold-pressed oils, syrups, wines and spirits. The 2024 “Green Week” event is attended by over 1,400 exhibitors from 60 countries, attracting some 300,000 visitors.

     

    TENNIS The Romanian-Ukrainian pair Gabriela Ruse/Marta Kostiuk qualified for the quarterfinals of the women’s doubles event at the Australian Open on Sunday, after defeating Hanyu Guo (China) / Alexandra Panova (Russia) 7-5, 4-6, 7-6 (10/6). Ruse and Kostiuk have played two Grand Slam women’s doubles semifinals together, one in Melbourne in 2023 and one at Roland Garros in 2024. In the quarterfinals, they will take on Su-Wei Hsieh (Taiwan) and Jelena Ostapenko (Latvia). (AMP)

  • January 19, 2025

    January 19, 2025

    UNIONS Romanian trade unionists ask the politicians in power to talk directly with the people, because social tensions are high, and the powder keg could explode at any moment. This warning was issued by the Cartel Alfa federation in a statement that says political decision-makers have abandoned open communication with Romanians. The budget deficit must be corrected by improving collection, but the government refuses to take any measures outside of recipes that have proven ineffective for years, Cartel Alfa also says.

     

    JOBS Nearly 33,000 positions are declared vacant by employers in Romania, the National Employment Agency announced. Most of them, over 20,000, are intended for unskilled applicants or primary and secondary school graduates. Another 10,000 jobs require high school, post-secondary school or vocational education. A little over 1,900 jobs require a degree, including positions as engineers in various sectors, computer programmers, financial and accounting experts or veterinarians. Also, employers from the European Economic Area offer employment through the EURES Romania network; 100 jobs are available in Germany and Spain, and another 27 in Austria, Ireland and Malta.

     

    ECONOMY The World Bank has revised downward its outlook for the Romanian economy this year, mainly due to the fiscal consolidation measures recently announced by the government. In its latest global economic outlook report, the World Bank lowers its estimate for Romania’s economic growth rate to 2.1% this year, as against 3.8% forecast in June 2024. Also, in 2026, Romania’s GDP growth is expected to be 2.6% compared to 3.8%, as estimated in June. On the other hand, economic growth in Central Europe is expected to recover to 2.8% in 2025 and 3% in 2026, thanks to robust private demand. Export growth in Central Europe is expected to remain modest due to slow progress in the Euro area. The level of investments, especially in Poland and Romania, is expected to improve, thanks to structural reforms and EU funding.

     

    MILITARY Hundreds of British military vehicles are on their way to Romania by ferry, in order to take part in a major NATO exercise, London announced. 2,400 British soldiers with 730 military vehicles will form the main battle group, supported by troops from five other NATO countries, with the United Kingdom assuming command of the land component. The new Allied Reaction Force (ARF) replaced the NATO Response Force (NRF) last year, and aims to respond quickly and effectively to any threat in times of peace, crisis or conflict.

     

    MIDDLE EAST A senior Israeli official said that Israel received a list of hostages in Gaza who are to be released today by the Palestinian Islamist movement Hamas. Israel’s national security minister Itamar Ben-Gvir has resigned to protest the ceasefire agreement between Israel and Hamas, Israeli media reported today. Ben-Gvir’s far-right and ultranationalist party will leave the ruling coalition. After months of deadlock in the 15-month war in Gaza, a three-stage agreement was reached earlier this week. During an initial six-week ceasefire, 33 Israeli hostages held in Gaza are to be released in exchange for 1,904 Palestinians held in Israeli prisons, while the Israeli army is to pull out of densely populated areas in Gaza. Meanwhile, however, the army carried on its attacks in Gaza, where at least five people were killed.

     

    HANDBALL The women’s handball team CS Rapid Bucharest face today at home the Danish side Odense Handbold, in the Champions League Group B. The day before, in Group A, the Romanian champions CSM Bucharest defeated the Slovenian side Krim Mercator Ljubljana 36-23, also at home. In the same group, Gloria 2018 Bistriţa-Năsăud were defeated, away from home, by the Croatian team RK Podravka Vegeta Koprivnica, 26-25. In the group standings, CSM are in 4th place, with 10 points, and Gloria are in 6th place, with 6 points.

     

    TENNIS The Romanian-Ukrainian pair Gabriela Ruse/Marta Kostiuk qualified for the quarterfinals of the women’s doubles event at the Australian Open on Sunday, after defeating Hanyu Guo (China) / Alexandra Panova (Russia) 7-5, 4-6, 7-6 (10/6). Ruse and Kostiuk have played two Grand Slam women’s doubles semifinals together, one in Melbourne in 2023 and one at Roland Garros in 2024. In the quarterfinals, they will take on Su-Wei Hsieh (Taiwan) and Jelena Ostapenko (Latvia). (AMP)

  • December 14, 2024 UPDATE

    December 14, 2024 UPDATE

     

    NEGOTIATIONS In Bucharest, negotiations on a future coalition of the pro-European parties in Parliament have made progress with respect to the structure of the new government. The Social Democratic Party will control 7 ministries, the National Liberal Party 4, Save Romania Union 3, and the Democratic Union of Ethnic Hungarians in Romania 2, said the Social Democrats’ senior vice-president Sorin Grindeanu. It has not yet been decided which ministries will go to each party and the names of the new ministers. On the other hand, the Social Democrats and and the Democratic Union of Ethnic Hungarians plead for a single presidential candidate of the coalition. After the Constitutional Court cancelled the election for president, the future executive will have to decide by the end of the year on a new presidential election calendar, the UDMR believes. The pro-European parties elected in Parliament hope to come up with a cabinet by Christmas.

     

    EU FUNDING Romania collected EUR 1.9 billion in EU structural and cohesion funds in 2021-2027, and the overall absorption rate, 6.11%, is close to the EU average of 6.19%, the minister of investments and European projects, Adrian Câciu announced. The absorption rate for the structural and cohesion funds under centrally managed programmes is higher, namely 7.3%, Caciu said in a Facebook post. He emphasised that Romania is yet to to catch up on Regional Programmes, where the absorption rate is 3.2%, but he voiced confidence that the example set by the current coalition comprising the Social Democrats and the Liberals in terms of management and implementation of European funds, including decentralisation, will be followed by the new government, and the pace of EU fund absorption will be sustained, so as to replicate the success of the 2014-2020 period.

    PARLIAMENT On Monday the last week of work for the current legislature begins, with many bills still unfinished for Romanian Senators and Deputies. Until the new Parliament is convened, the Chamber of Deputies should adopt the new Forestry Code, which has been on the agenda for several months. The code is a benchmark in the National Recovery and Resilience Plan and a priority for the Government, which says the document must be adopted by the end of the year. The bill provides, among other things, for the seizing of vehicles carrying stolen wood, for green belts around major cities, for preemptive rights and reasonably priced quality materials for local furniture manufacturers, for video monitoring of forest roads, and bans clear-cutting in all protected areas. Meanwhile, the Senate is expected to vote on a bill punishing holders of multiple positions financed from the state budget and on another one limiting to two the number of terms in office for the heads of the secret services. The current MPs remain in office until December 20, when the first session of the new Parliament is scheduled, following the December 1 general elections.

     

    ECONOMY Romania’s trade deficit was EUR 5.5 billion higher in the first 10 months of the year than in the same period in 2023, according to data made public by the National Bank. More than half of this deficit is the result of growing imports of goods. The central bank also says that the total foreign debt went up over EUR 18 billion and exceeded EUR 186 billion. According to analysts, along with the very high budget deficit, these are the main problems of the Romanian economy, and they must be solved concurrently, which is very difficult. They believe that through a correct budget adjustment, expenses would be cut, and revenues could be raised by eliminating corruption and through a fair tax system.

     

    ANNIVERSARY Timişoara marks 35 years since the anti-communist Revolution of December 1989, which broke out in this city in western Romania. Under the motto “35 years of freedom”, events dedicated to the 1989 heroes and celebrating the three and a half decades since Timişoara became the first city free from communism in Romania will take place between December 15 and 20. The agenda includes, as every year, religious services, wreath-laying, exhibitions and film screenings. A concert entitled Requiem in Memoriam is scheduled on Sunday at the Banat Philharmonic, Monday will see the inauguration of the Freedom Portal, a light installation that reproduces sounds from the Revolution, followed by the traditional march “Heroes Never Die”. Tuesday will be a day of mourning, and the events on December 20 will end with a concert called “Rock for revolution”. (AMP)

  • December 14, 2024

    December 14, 2024

     

    NEGOTIATIONS In Bucharest, negotiations on a future coalition of the pro-European parties in Parliament have made progress with respect to the structure of the new government. The Social Democratic Party will control 7 ministries, the National Liberal Party 4, Save Romania Union 3, and the Democratic Union of Ethnic Hungarians in Romania 2, said the Social Democrats’ senior vice-president Sorin Grindeanu. It has not yet been decided which ministries will go to each party and the names of the new ministers. On the other hand, the Social Democrats and the Democratic Union of Ethnic Hungarians plead for a single presidential candidate of the coalition. After the Constitutional Court cancelled the election for president, the future executive will have to decide by the end of the year on a new presidential election calendar, the UDMR believes. The pro-European parties elected in Parliament hope to come up with a cabinet by Christmas.

     

    EU FUNDING Romania has collected EUR 1.9 billion in EU structural and cohesion funds in 2021-2027, and the overall absorption rate, 6.11%, is close to the EU average of 6.19%, the minister of investments and European projects, Adrian Câciu announced. The absorption rate for the structural and cohesion funds under centrally managed programmes is higher, namely 7.3%, Caciu said in a Facebook post. He emphasised that Romania is yet to catch up on Regional Programmes, where the absorption rate is 3.2%, but he voiced confidence that the example set by the current coalition comprising the Social Democrats and the Liberals in terms of management and implementation of European funds, including decentralisation, will be followed by the new government, and the pace of EU fund absorption will be sustained, so as to replicate the success of the 2014-2020 period.

     

    ECONOMY Romania’s trade deficit was EUR 5.5 billion higher in the first 10 months of the year than in the same period in 2023, according to data made public by the National Bank. More than half of this deficit is the result of growing imports of goods. The central bank also says that the total foreign debt went up over EUR 18 billion and exceeded EUR 186 billion. According to analysts, along with the very high budget deficit, these are the main problems of the Romanian economy, and they must be solved concurrently, which is very difficult. They believe that through a correct budget adjustment, expenses would be cut, and revenues could be raised by eliminating corruption and through a fair tax system.

     

    ANNIVERSARY Timişoara marks 35 years since the anti-communist Revolution of December 1989, which broke out in this city in western Romania. Under the motto “35 years of freedom”, events dedicated to the 1989 heroes and celebrating the three and a half decades since Timişoara became the first city free from communism in Romania will take place between December 15 and 20. The agenda includes, as every year, religious services, wreath-laying, exhibitions and film screenings. A concert entitled Requiem in Memoriam is scheduled on Sunday at the Banat Philharmonic, Monday will see the inauguration of the Freedom Portal, a light installation that reproduces sounds from the Revolution, followed by the traditional march “Heroes Never Die”. Tuesday will be a day of mourning, and the events on December 20 will end with a concert called “Rock for revolution”.

     

    IMPEACHMENT South Korea’s prime minister Han Duck-soo Saturday vowed to ensure a stable government after the National Assembly voted to impeach president Yoon Suk-yeol over his failed attempt to introduce martial law on December 3, AFP reports. Tens of thousands of protesters cheered outside the National Assembly building as the vote was announced. Citing difficulties in passing his budget, Yoon Suk-yeol stunned the country by imposing martial law overnight, but was forced to lift it 6 hours later under pressure from parliament and the street. Under investigation for mutiny, Yoon, 63, is banned from leaving the country, as are his former defence and interior ministers and the commander of the short-lived martial law. (AMP)

  • Downward forecast from the European Commission

    Downward forecast from the European Commission

    Romania’s economic growth estimate has been recalculated by the European Commission (EC), at a value well below the initially established figure. In the forecast published in the spring of 2024, the estimate was that the economy would register an advance of 3.3% this year, followed by one of 3.1% in 2025. In a recent document, however, the EC states that the growth rate of the Romanian economy will slow down to 1.4% this year, then accelerate slightly to 2.5% in 2025. During this year, industrial production, constructions, IT and transports have slowed down due to the decrease in external demand from Romania’s main trading partners, the rapid increase in wages and the high energy prices. At the same time, retail sales have grown strongly as available incomes have grown at a rapid pace. However, the dynamic private consumption was largely counteracted by the negative contribution of exports to the GDP growth, while the growth of private investments was moderated by the uncertainty surrounding the expected fiscal consolidation measures, the EC stated.

     

    On the other hand, according to the new forecasts, Romania’s budget deficit is forecast to reach 8% of the GDP in 2024 and to remain at a high level of 7.9% of the GDP in 2025. Comparatively, in the spring, Brussels estimated that the deficit was expected to reach 6.9% of the GDP in 2024 and 7% of the GDP in 2025. According to the EC, the deficit exceeding the expectations reflects a very rapid increase in government spending, mainly due to increases in public sector wages, to spending on goods and services, and social transfers, including pensions. It also reflects a slightly slower revenue growth due to weaker than expected economic activity. The good news is that inflation is expected to continue to decline in Romania, from an average of 10% in 2023, to around 5.5% in 2024. However, pressures on prices remain high, due to strong domestic demand, on the backdrop of increasing salaries and pensions, warns the EC.

     

    Despite the economic slowdown, the demand for jobs remains strong, and the unemployment rate will be 5.5% in 2024 and 2025 and 5.4% in 2026. At the same time, public debt is expected to increase from 48.9% of the GDP in 2023 to almost 60% by 2026. The forecast does not include any impact of the government’s potential budget deficit reduction measures on revenues or expenditures, measures included in the medium-term fiscal and structural plan that Romania presented to the EC in October. These measures are not sufficiently specified by the government at this stage, the report points out. However, they have the potential to significantly reduce the public deficit in relation to this forecast, if they are designed and implemented properly in the budget for 2025. In its latest report, the IMF also revised downwards to 1.9% the estimates regarding the advance of the Romanian economy this year, from 2.8% as forecast in April. (LS)

  • Growing trade deficit

    Growing trade deficit

    The trade balance deficit recorded in Romania in the first nine months of the current year increased by 15%, as compared to the same period of 2023, up to the value of approximately 23.5 billion Euros, according to data published on Monday by the National Institute of Statistics. In the mentioned interval, exports exceeded 69 billion Euros, decreasing by 1.4%. Imports totaled almost 93 billion Euros, increasing by 2.3%. According to the National Institute of Statistics, in the first nine months of this year, important shares in the structure of exports and imports are held by the following product categories: machines and transport equipment (almost 47% of exports and over 36% of imports) and other manufactured products. The value of intra-EU exchanges in goods exceeded 50 billion Euros in outgoings and was more than 67 billion Euros in incomings. The value of extra-EU exchanges was more than 19 billion Euros in exports and more than 25 billion Euros in imports.

     

    Also on Monday, the National Bank of Romania (BNR) raised the inflation forecast for the end of this year to 4.9%, from 4% as estimated in August. It basically returned to the forecasts from the quarterly report on inflation published in May. The governor of the BNR, Mugur Isărescu, emphasized that the Central Bank makes its forecasts only based on certain data and that the way in which the fiscal-budgetary correction will be made in order to reduce the deficits will also influence the actual evolution of inflation. He said that he expected a coherent macroeconomic correction program with strong political support.

     

    Track: “That’s what we’re waiting for. A credible macroeconomic correction program from the new government, to be supported politically, socially accepted and effective from a macroeconomic point of view, so that we can connect. We can conceive, I mean us, the Romanians, a gradual adjustment program, 0.7 per year, significantly lower than an economic growth, which we think to set at 2% per year, which can be combined with avoiding decreasing the standard of living, but not with 16% increases in gross or net or real incomes, that can no longer be done”.

     

    The National Bank anticipates that inflation will go below 3.5% per year only in 2026. Mugur Isărescu pointed out that the evolution of prices is marked by a series of risks and uncertainties. These are related to both the fiscal policy and salary increases, and to external factors, such as the evolution of the European economies with which Romania conducts most of its commercial relations, the dynamics of the oil price, in the context of increasing geopolitical tensions, and also the way the conflicts will evolve in Ukraine and the Middle East. In the latest “World Economic Outlook” report, recently published, the International Monetary Fund has revised down to 1.9% the estimates regarding the growth of the Romanian economy this year, from 2.8% as forecast in April. (LS)