Radio România Internațional

Tag: economy

  • Conclusions of the IMF mission in Romania

    Conclusions of the IMF mission in Romania


    The recently adopted fiscal package is a step in the right direction but further adjustment is need, the International Monetary Fund (IMF) delegation that assessed, until Wednesday, the state of the Romanian economy said in a press release. IMF experts have forecast a 2.3% economic growth for Romania this year and a budget deficit of 6% of the GDP and recommended the Romanian authorities to implement additional reforms accounting for 2% of the GDP. To this end, key measures to be considered are the elimination of remaining exemptions, privileges and loopholes, further VAT streamlining, implementing the reformed property tax and using tax policy to promote the efficient use of energy and, more broadly, foster the transition to a carbon-neutral economy.



    According to the international experts, the new tax package improves policy design in some areas. It broadens the tax base and improves revenues by limiting exemptions for workers in the agricultural, construction, food processing and IT sectors, and by limiting the number of goods subject to reduced VAT rates. The new fiscal package will improve public finances in 2024 and beyond by about 1 percent of GDP, resulting in a deficit of just above 5 percent of GDP, in 2024. However, fiscal deficits will need to fall below 3 percent of GDP, as agreed with the European Commission, to stabilize public debt over the medium term, help secure necessary market financing at lower interest rates, and support ongoing disbursement of EU funds. According to the IMF experts, increasing the predictability of expenditure with salaries and pensions is welcome, but the Governments decision to control the price of food products is not the right strategy to lower the prices.



    Moreover, the head of the IMF mission, Jan Kees Martijn, warned that it could be challenging to implement fiscal consolidation and the next steps under the National Recovery and Resilience Plan (NRRP) during a year with multiple elections such as 2024. He also said that additional taxes for banks put increase the burden on companies and could impact their financial results.



    Among the measures recommended by the IMF mission, is also improvement in administration and a good planning of fiscal policy, which should be communicated in a clear manner, so as to offer predictability to both companies and the population. Also needed is, according to the international experts, new investment and budget allocations to education and healthcare, to bring them to EU level.



    On their last day in Bucharest, the IMF experts met with the Romanian PM Marcel Ciolacu. He said the IMF recommendations, which are similar to those of the World Bank and the European Commission are already taken into account. At present, the Government focuses on reducing budget spending and fighting tax evasion and the bill for which it took responsibility in Parliament creates the general framework for the fiscal reform the Government wants to conduct. Marcel Ciolacu estimates that Romania will have one of the biggest economic growth rates in the EU this year and that the measures taken will help the country overcome the difficult situation experienced lately. (EE)




  • September 27, 2023 UPDATE

    September 27, 2023 UPDATE

    EBRD The European Bank for Reconstruction
    and Development has revised down its forecast on the development of the
    Romanian economy in 2023 and 2024, according to a report made public on
    Wednesday by this international financial institution. Thus, Romania’s GDP is
    likely to grow only by 1.8% this year, from the 2.5% May forecast. Also,
    the country’s economy is expected to see a 3.2% growth next year, as
    compared to 3.5% estimated in May, the report also says.




    COVID The COVID-19 cases are on the rise in
    Romania with over 14,800 infections confirmed in the past week. The number of
    cases is four times higher than a month ago. 41.3% of the new infections have
    been registered in Bucharest, Timis, in the west of the country, Iasi in the
    north-east, Prahova and Ilfov in the south. The number of hospitalized patients
    is also on the rise. Out of the 1150 patients reported, 74 are presently in ICU.
    27 people died last week after being infected with SARS-COV2. Almost all were
    suffering from other diseases.






    DEFENCE Romania’s Chief of Staff
    has staged an online meeting with the representatives of the local public
    authorities in south-eastern Romania in the context of the latest Russian
    attacks on the Ukrainian bank of the Danube. According to a communiqué by the Ministry
    of Defence, the conference focused on the optimization of the
    inter-institutional coordination. High on the agenda were also a presentation
    of the security situation, the army’s public communication, issues related to preparing
    the population, economy and territory for defence, the legal responsibilities
    of various institutions in the national defence system.




    SCHENGEN Romania expects and deserves a
    positive decision during the Spanish presidency of the EU Council regarding the
    Schengen enlargement, the President of the European Parliament, Roberta
    Metsola, said in Brussels. She was optimistic about the entry of Romania and
    Bulgaria into the ​​free movement area. The accession of the two countries was
    blocked by Austria and the Netherlands, at the Justice and Home Affairs Council
    last December, for alleged insufficient control of migrant flows. In the case
    of Romania, Austria was the only country against the accession.


    (bill)

  • September 25, 2023

    September 25, 2023

    POLL According
    to a poll conducted by the Center of Urban and Regional Sociology, (CURS) most
    of the Romanians believe that things are rather going wrong in Romania. 69% of
    the respondents share this opinion, whereas only 22% of them believe the
    country goes in the right direction. 41% of those questioned believe their
    situation will be more difficult next year, 38% that it will remain the same whereas
    18% says that things will improve. According to the CURS poll, the main issues
    the Romanians are presently facing are the inflation, the higher prices and their
    low incomes, the dropping standard of living, corruption and theft. The most
    trusted institutions remain the firefighters (73%) followed by the army (68%)
    and the church (63%). If elections were to take place next Sunday, 50% of the
    interviewees would be voting for the parties presently ruling Romania, the PSD
    and PNL.




    FESTIVAL The concert of the Concertgebouw Royal
    Orchestra of Amsterdam on Sunday night ended the 26th edition of the
    George Enescu International Music Festival. The Academic Radio Choir and the
    Children Radio Choir have also participated in the aforementioned event, which
    brought together over 40 orchestras from 16 countries and over 35 hundred of
    the world’s most renowned musicians. This festival, one of the world’s most
    important, will be followed by Remember Enescu, a contest devoted to the young
    musicians. This year’s edition kicks of on Monday in Timisoara, western
    Romania.




    IMF A team of the International Monetary Fund comes to
    Bucharest today for the annual round of talks over the Romanian economy. Until
    October 4th, international experts will be holding talks on the
    economic policies and the latest developments in the field with representatives
    of the Finance Ministry, the Central Bank and various NGOs. The IMF team will
    also be meeting representatives of the private sector for talks, which are
    taking place periodically in all member states with a view to presenting
    recommendations for ensuring stability and a positive development at the level
    of the economy.




    LAWS The completion of the measure package aimed
    at balancing the state budget will be preceded today by a new round of talks in
    Bucharest between Prime Minister Marcel Ciolacu and Finance Minister Marcel
    Bolos followed by another round of consultation with employers associations and
    trade unions on the matter. Also today, the Executive is to endorse a draft law
    for which it will assume responsibility in Parliament. The government’s
    intention is to effectively combat tax evasion, ensure fiscal equity and curb
    red tape. The VAT will remain low for a series of products and goods – 5% for
    firewood, thermal energy, natural gas and other things related to household
    consumption. The VAT will stay at 9% for food stuff and medicine, whereas
    products destined for people with abilities will remain exempted from the VAT.
    Holiday vouchers will be given only to state employees with incomes up to 16
    hundred euros.


    (bill)

  • September 6, 2023

    September 6, 2023

    Summit.
    The Three Seas Initiative Summit is getting under way in Bucharest today,
    bringing together EU member states from Central and Eastern Europe. This year,
    Greece will become the 13th country to participate in the Initiative, while Romania’s
    neighbours Ukraine and the Republic of Moldova will be awarded the status of
    associate countries. A declaration will be adopted at the end of the summit,
    which will become an important guideline for the Initiative’s future activities
    aimed at boosting cross-border interconnection in the field of transport
    infrastructure, energy and digitalisation. The United States has reiterated its
    support for the Three Seas Initiative objectives and its availability to work
    closely with its partner states to advance this format. The US delegation at
    the summit in Bucharest is led by the US special presidential envoy for
    climate, John Kerry, who is also scheduled to meet prime minister Marcel
    Ciolacu.




    Moldova. Romania supports the request of the Republic of Moldova to
    become an associate country of the cooperation format within the Three Seas
    Initiative, said prime minister Marcel Ciolacu today during talks with the president
    of neighbouring Moldova, Maia Sandu. Talks also looked at the stage of
    bilateral relations, with the prime minister saying Romania recently
    transferred the first tranche worth 10 million euros aimed at funding priority
    projects, such as the purchase of school minibuses and infrastructure and local
    development projects. Prime minister Ciolacu reiterated Romania’s support for
    the accession of the Republic of Moldova to the European Union and said the
    priority right now is securing a decision on opening accession talks at the
    European Council in December.




    Schools. With school starting in Romania on 11th
    September, the authorities are planning tougher measures to prevent trafficking
    in and consumption of psychoactive substances among pupils. They also aim to
    crack down on bullying and reduce the risk of pupils’ exposure to crime,
    especially violence. These are some of the most important elements of a
    national safety plan signed on Tuesday by a number of cabinet ministers. Referring
    to the controversial issue of pupils’ drug testing, education minister Ligia
    Deca said a system would be devised to provide and finance such tests in the
    event of reasonable suspicion, but only with parental approval and avoiding the
    stigmatisation of children.






    Economy. The Romanian minister for the economy,
    entrepreneurship and tourism Ştefan Radu Oprea called, during a meeting with
    the vice-president of the European Commission and EU commissioner for trade Valdis
    Dombrovskis, for flexibility from the Commission during talks on the budget
    deficit, given that Romania’s budget was affected by the direct and indirect
    costs of the war in Ukraine. The Romanian official was in Brussels on 4th
    and 5th September. His talks with the EU official focused on trade
    relations with Ukraine, with emphasis on measures related to grain exports, as
    well as on the need to find ways to support Romanian farmers.








    Tennis. The Romanian tennis player Sorana Cîrstea
    missed qualifying for the US Open semifinals, as she lost on Wednesday in
    straight sets to the Czech player Karolina Muchova. Seeded 30, Cîrstea, aged
    33, reached the US Open quarterfinals for the first time in her career. The
    last time she reached this round was at the French Open in 2009, aged 19. From
    Monday, she will go up to number 26 in the WTA ranking, being the
    highest-ranked Romanian player. (CM)

  • Advices on Romania’s economy

    Advices on Romania’s economy

    The longest-lasting leading figure in
    post-communist Romania is the country’s Central Bank governor, Mugur Isarescu.
    Born in 1949, Isarescu is also the longest lasting chief of a central bank in
    the world as he has been on the job since 1990. As an independent candidate, in
    1999 he headed the country’s then center-to-right coalition government and in
    the next year he ran, without being successful though, for the country’s
    presidential seat, mustering only 9.54% of the votes in the first round.


    He came back to the
    position of governor, which he has kept for nearly a quarter of a century.
    Although not very popular with some, his competence and determination haven’t
    been contested yet.


    Over the past three
    decades, Isarescu has cooperated with many heads of government and Finance
    Ministers, so his statements have more weight than the emphatic platitudes uttered
    by the Romanian politicians who have often failed to fulfil their pledges. On
    the very day, the new PSD-PNL government, headed by social-democrat Marcel Ciolacu,
    was instated, the Central Bank governor called on the political decision-makers
    to adopt what he called a rational thinking. During a new round of talks on the
    country’s economic prospects, he mentioned the two directions any development
    strategy should be based on: coordination with the European economy and also the
    need for balancing the domestic supply-demand ratio. Agriculture, certain industrial areas or
    the green energy, he says, should become top priorities and more relevant on
    certain markets, such as the food market, currently under fierce competition.
    The governor has confessed, his amazement at Romania’s huge food imports in
    spite of having a significant agricultural potential.


    The business environment prospects have
    been presented by the president of the Romanian Chamber of Trade and Industry,
    Mihai Daraban, who believes that a viable economic model must start with the
    idea of association in the agrifood field, which has registered a significant
    imbalance in the country’s international trade. Poland, which boasts one-third
    more surface than Romania, has only 90 thousand farmers, whereas Romania has
    796 thousand, most of them owners of small farms. So it has become now very
    difficult to talk about competitiveness in this area,’ says the head of the
    Trade Chamber, whom the economic media has dubbed ‘the employer of employers’. Daraban
    has been pleading for Romania’s administrative-territorial reshuffle, which
    means the reduction of the number of communes and counties by bringing them
    together under the same umbrella, and implicitly cutting down costs with the local
    administrations, which proved ineffective and terribly expensive.


    (bill)

  • May 18, 2023 UPDATE

    May 18, 2023 UPDATE

    FORUM The world has changed and everything in the area of security
    has been rewritten and must be revised in our Black Sea region, where a large
    part of the components of Russia’s large scale war of aggression in Ukraine are
    taking place, said Romanian prime minister Nicolae Ciucă in Bucharest at the
    7th edition of the Black Sea and Balkans Security Forum. Ciucă went on to say
    that the region must cope with a long and high-intensity war that is exhausting
    the resources of both the country in conflict and those of the countries of
    Europe. The two-day forum hosts over 40 sessions. Attending are top civilian
    and military officials, diplomats and experts from the European Union and NATO,
    as well as partner states. The themes discussed include support for the
    European integration of the Republic of Moldova and Ukraine, the reconstruction
    of Ukraine and the European security architecture after the war, as well as the
    food crisis caused by Russia’s invasion, security energy in Europe, the
    security of the Western Balkans and cyber resilience.


    FLOODING Prime minister Nicolae Ciucă said the Romanian authorities
    are ready to provide assistance with rescue operations following the floods in
    Italy. The region of Emilia Romagna in the north of Italy is on high alert as a
    result of heavy rain that caused massive floods and left victims. According to
    Radio Romania’s correspondent, thousands of people have already been evacuated,
    but several tens of thousands are still stranded in areas that have been left
    without electricity. Some trains are still stationary, traffic is disrupted and
    sections of the motorway are closed.


    AGREEMENT The government of Romania and of the UK Thursday
    signed a joint action plan in Bucharest on fighting human trafficking. The
    document is part of the vision and strategy that Bucharest has embraced for the
    past 2 years to turn Romania into a country hostile to people traffickers but
    safe and friendly to the victims of this phenomenon, reads a news release
    issued by the Romanian government. Signing the document also proves our
    government’s concern and care for its more vulnerable citizens, those more
    exposed to the risks of human trafficking, who live either in Romania or in one
    of the largest Romanian diaspora communities, namely in the UK. It is absolutely vital for us to keep our
    firm commitment of fighting this scourge and our capacity and willingness to
    tackle this issue on all three key levels-prevention, combating and victim
    protection. (…) My message is quite clear: trafficking in human beings is a
    form of crime for which the government of Romania has zero tolerance, PM
    Nicolae Ciucă said.



    WB In order to solve external imbalances, Romania
    needs a mix of fiscal consolidation and structural reforms, reads a World Bank
    analysis. Political measures aimed at improving its fiscal situation include
    broadening taxable revenues, improving tax compliance, introducing critical
    reforms in public pensions and salaries and cutting inefficient expenditure. A
    consolidation of public investment management would help release significant EU
    funding and would improve critical sectors lagging behind in Romania, such as
    the public education and healthcare, reforming state-owned enterprises, or
    infrastructure. In turn, the latter would contribute to improved productivity
    and competitiveness, with a positive impact on Romania’s foreign position. Romania’s
    external imbalances have deepened lately. Since 2018, the country has seen
    deepening fiscal and current account deficits, jointly with an expansionary
    fiscal policy. The two major external shocks, the Covid-19 pandemic and the war
    in Ukraine, have strengthened these imbalances. (AMP)

  • Spring economic forecasts

    Spring economic forecasts


    The COVID-19 pandemic, skyrocketing energy prices, steep inflation and the consequences of the war started by Russia in neighbouring Ukraine were as many blows to the economy of the EU countries.



    And still, they seem to have absorbed these successive shocks and to get back to a positive trend. The European Commission has announced that the blocs economy performed better than expected, with a one per cent growth of GDP in the first 3 months of the year.



    Of the 27 member states, Romania is expected to see a 4% economic growth this year, one of the best in the EU. Positive factors include a drop in energy prices back to the level reported 2 years ago, a resilient labour market, a rise in consumption and investments.



    The EU economy, experts say, has managed to contain the negative impact of Russias war of aggression against Ukraine, and coped with the energy crunch by quickly diversifying supply sources and by reducing considerably its natural gas consumption.



    The significant drop in energy prices has ripple effects across the economy, leading to falls in production costs. In turn, consumers get lower energy bills, although private consumption is expected to stay low as long as salary increases remain below the inflation rate.



    However, the inflation rate dropped in the first quarter of 2023 and it may reach 7.3% in April and 5.8% towards the end of the year, says Radio Romanias correspondent in Brussels, who looked at the European Commissions spring economic forecasts.



    The EU Commissioner for Economic and Financial Affairs, Paolo Gentiloni, acknowledges negative aspects, such as the rise in interest rates and tighter conditions for loans, but says that, rather than a weakness of the banking system, this is an adjustment to post-crisis signals.



    Another major element for the European economy is the implementation of post-Covid national recovery and resilience plans, which are basically capital injections, with an average absorption rate of 3% of GDP. According to the EU Commissioner, by 2024, recovery and resilience plans will have amounted to 3.5% of Spains and Greeces gross domestic product, nearly 3% in Croatia and Portugal, 2.5% in Slovakia and Italy, 2% in Romania and Bulgaria, 1.5% in Poland and Hungary and 1% in France and Slovenia.



    The Unions labour market is expected to have a moderate response to the slower economic growth rate. Employment is predicted to go up 0.5% this year and 0.4% in 2024, with the unemployment rate estimated to stay at little over 6%. (AMP)


  • May 11, 2023 UPDATE

    May 11, 2023 UPDATE

    PLANT Romania will have the first tyre
    plant without carbon dioxide emissions in the world. Construction works already
    started on this plant in Oradea north-western Romania on Thursday. The total value
    of this investment stands at around 600 million Euros and is being made by a
    well-known Finnish consortium. The Romanian government’s contribution stands at
    100 million Euros. The output is due to commence next year and the new factory
    will provide hundreds of new jobs. The investment was launched in the presence
    of Romania’s Prime Minister Nicolae Ciuca, who said: It is very important in
    the moves currently underway at the EU and world level to protect the
    environment and is an example to be followed.








    RISK Romania runs the risk of staying in the middle-income
    trap and unless it changes its present outdated economic model, it would find
    it very difficult to become a state with a developed economy, NATO Deputy
    Secretary General Romanian Mircea Geoana said. In my opinion, Romania’s
    present economic model is outdated. It has far too long been based on small
    incomes, cheap labour and exports with much too little added value to be able
    to be competitive and climb the ladder of the developed nations. That’s why it
    is very clear that we need to build our future by learning from what went wrong
    in the past years Geoana said at the Future is now summit held in Bucharest.
    According to him only few countries have managed to get out of the
    middle-income trap like South-Korea for instance. He has also mentioned the
    efforts in this direction made by countries in our region such as the Czech
    Republic, Estonia and Poland.








    FESTIVAL The Cinefemina Film Festival
    has kicked off in Bucharest. The festival promotes and supports women working
    in the European film industry by screening features and short films directed by
    talented women filmmakers and producers. Running until May 14, the festival
    will bring to cinema halls 12 European features and 5 short films. Produced by
    film studios from Italy, France, Greece, Romania, Austria, the Netherlands,
    Portugal, Poland, Germany, Spain, Sweden and Hungary, the productions tackle a
    variety of genres, from comedy, drama to romance. This year, apart from film
    screenings, organizers have also prepared meetings with filmmakers as well as
    experts in a number of related fields, representatives of NGOs and journalists.
    These debates are aimed at promoting women in industries traditionally
    dominated by men.








    GRANTS European Transport Commissioner
    Adina Vălean on Wednesday distributed two grants worth 60 million euros to
    Romanian beneficiaries for the construction of the rail bridge in Ungheni on
    the Romanian border with the Republic of Moldova and for the modernization of
    the Port of Constanța in the southeast. The funds are earmarked under the
    Connecting Europe Facility. Regarding the bridge in Ungheni, Commissioner Vălean
    said the project will be an extension of the A8 motorway to the Republic of
    Moldova, adding that Romania has applied for and secured funding for six
    bridges.




    (bill&VP)

  • March 10, 2023 UPDATE

    March 10, 2023 UPDATE

    ECONOMY Net
    investments in the Romanian economy in 2022 were over EUR 30 bln, up 8.5% since
    the previous year, PM Nicolae Ciucă announced. He says this proves the positive
    impact of the measures taken by his Cabinet on the economy. Investment in
    development, the PM also says in a Facebook post, will preserve jobs and
    generate new ones, and in the long term it will contribute to higher revenues. Other
    data made public by the National Statistics Institute, which the PM says
    confirm the success of the Romanian economy in 2022, are a 4.8% GDP growth, foreign
    direct investments of EUR 11.3 bln, a 73% rate of EU fund absorption and
    exports amounting to EUR 85 bln. On the other hand, Romania’s public debt
    dropped in December 2022 to 47.2% of GDP, from 48.3% in November 2022 and 48.9% in 2021, the finance
    ministry announced. In 2023, expenditure for public investments is expected to
    account for 7.2% of GDP.


    VISIT After his visit to Japan, president Klaus Iohannis travelled
    to Singapore, where he had talks with his counterpart, Halimah Yacob. The Romanian
    president highlighted Romania’s goal to step up bilateral relations with
    Singapore. Additionally, president Iohannis spoke of a set of common goals
    pursued by both presidents, such as inclusion policies, economic and social
    development and green transition. He voiced Romania’s special interest in fully
    tapping the potential of bilateral relations, particularly in the economic and
    investment area, and underscored Bucharest’s objective to attract investment
    from Singapore, especially since Romania is the third-largest EU provider of IT
    services to that country. In turn, the president of Singapore, Halimah Yacob, highlighted
    the importance of the bilateral relation considering Romania’s growing profile
    at EU and NATO levels, particularly in the geopolitical context generated by
    the war in Ukraine. President Yacob also addressed the need to boost investment
    and two-way trade, considering the opportunities provided by such sectors as
    IT&C, cyber security and tourism. The Romanian head of state also had talks
    with Singapore’s PM Lee Hsien Loong, who emphasised the convergence of views and
    interests of the two countries in the current geopolitical context, and the
    importance of respecting the rule-based international order centred on the UN
    Charter.


    BYSTROYE The biodiversity of the Danube Delta is not affected by
    dredging works on the Bystroye Canal, and no significant water flow changes on
    the river Danube have been reported compared to statistics published in recent
    years, says the Environment Minister Tanczos Barna after the first measurements
    conducted by Romanian authorities on the branch of Chilia and Romanian sections
    of the Danube. The Romanian official said Ukrainian authorities must provide a
    written consent before the three ships of the Transport Ministry can finalize
    depth measurements across the entire section of the Chilia branch, run a new
    analysis of water flows and provide their final report. Authorities from
    Romania and Ukraine have agreed to measure the depth of Danube River canals
    after Kyiv started dredging the Bystroye canal. The Ukrainian Infrastructure Ministry
    said that, once dredging works were completed, the depth of Bystroye grew from
    3.9 to 6.5 meters. Kyiv has however denied that the works violated any
    agreement. Bucharest wants to make sure Ukraine’s operation does not impact
    ecosystems in the Danube Delta, a protected UNESCO World Heritage site.


    REFUGEES A centre for Ukrainian refugees was opened on Friday within
    the Edmond Nicolau Technical College in Bucharest. The centre is
    the outcome of a partnership between Bucharest’s District 2 Hall, UNICEF and Habitat
    for Humanity. Its 3 floors, totalling 2,000 sq m, can host 100 people. The
    district mayor says refugees may live, cook, socialise here, and that special
    areas are arranged for children to do their homework.


    MOLDOVA The US Administration will provide the Republic of Moldova
    with USD 300 mln in assistance for the energy sector and will share information
    with this country in a move to fight Russia’s attempts to destabilise it, the
    White House announced on Friday. The national security spokesperson John Kirby
    told the media that, although there is no imminent military threat against
    Moldova, the US believes Russia is seeking to weaken this small country and
    bring in a more pro-Russian government. He also said Washington has confidence
    in Moldova’s democratic and economic institutions and in their capacity to
    withstand these threats. We will continue to provide significant support, said Kirby.
    Protests against the government and president Maia Sandu, organised in
    particular by the pro-Russian party Sor, have been a regular occurrence in
    Chişinǎu for several weeks. (AMP)

  • February 13, 2023 UPDATE

    February 13, 2023 UPDATE

    UN The Romanian foreign minister Bogdan
    Aurescu will be a main speaker on Tuesday in New York at the open debate of the
    UN Security Council on Threats to international peace and security:
    Sea-level rise: implications for international peace and security. Participants
    will discuss the risks posed by the rise in sea levels as a result of climate
    change and will explore ways to tackle these risks as part of the global
    security architecture. Romania’s presence in the UN Security Council
    consolidates Bucharest’s efforts to promote a rule-based international order
    and its role as an actor involved in the management of vital global problems,
    the Foreign Ministry says.


    MOLDOVA Moscow
    plans to force a change of the political power in the R. of Moldova in
    the forthcoming period, through violent actions
    designed to destabilise the country, Moldova’s president Maia Sandu said. According
    to her, Russia allegedly intends to use diversions, attacks on institutions and
    hostage taking. The plan was uncovered with the help of intelligence received
    from Kyiv, among others, Maia Sandu added. ‘The goal of these actions is to upset
    constitutional order, to replace the legitimate power in Chişinău with an
    illegitimate one, which will leave our country into the hands of Russia, to
    stop the European accession process and to ensure that Moldova can be used by
    Russia in the war against Ukraine,’ Maia Sandu said. Last Thursday in Brussels
    the Ukrainian president Volodymyr Zelenskyy spoke to EU leaders about such a
    plan put together by Russia.


    NATO Romania’s defence minister, Angel Tîlvăr, is taking part on Tuesday
    and Wednesday in Brussels in the meeting of the Ukraine Defence Contact Group
    and a meeting of the NATO defence ministers. The Allied defence ministers
    convene as part of the regular meeting schedule, and talks will primarily focus
    on continuing support for Ukraine, on the implementation of the decisions taken
    last July at the NATO Summit in Madrid and on preparing the decision package
    for the forthcoming Summit in Vilnius. The meeting begins on Tuesday night with
    an informal working meeting on security developments one year after the start of
    Russia’s war of aggression in Ukraine. Invited to attend are also the defence
    ministers of Sweden, Finland and Ukraine, and the EU High Representative for
    Foreign Affairs and Security Policy.


    VISIT The Minister-President of Bavaria, Markus Soder, who is on a
    visit to Bucharest, Monday reiterated support for Romania’s Schengen accession,
    emphasising that over the past few years the country made substantial progress
    in fighting corruption and structural reforms. We support Romania on its path
    towards Schengen accession. It is very important that we, in Europe, understand
    that here in particular, given the situation with Ukraine and Russia, the
    challenges are at an entirely different level, he added. Markus Soder also
    voiced his appreciation for the support given by Romania to the Ukrainian
    refugees. Markus Soder was received in Bucharest by president Klaus Iohannis and
    PM Nicolae Ciuca. The 2 ministers signed a joint Statement on consolidating
    bilateral relations, which also stipulates the resumption of the works of a
    joint Romania – Bavaria governmental committee.


    ECONOMY Romania’s economy is expected to grow by 2.5% in 2023 and by
    3% in 2024, with the inflation rate standing at 9.7% this year and 5.5% next
    year, according to the European Commission’s winter forecast made public on
    Monday. According to the EC, the implementation of the National Recovery and
    Resilience Programme should contribute to massive investments in Romania, driving
    the economic growth this year.


    WRD Monday was World Radio Day, established as such by UNESCO in 2011.
    February 13 marks the first broadcast by the United Nations’ radio station,
    back in 1946. The theme of World Radio Day this year was Radio and
    Peace. On this occasion, Romanian artists showed their solidarity with
    Ukraine. At 9:30 a.m. on Monday, all Radio Romania channels aired the famous
    song Heal the World, released by Michael Jackson in the early 1990s. The
    broadcast of this song on World Radio Day is part of a series of events organised
    by Radio Romania to mark one year since the start of the war in the
    neighbouring Ukraine. (AMP)

  • January 20, 2023 UPDATE

    January 20, 2023 UPDATE

    ECONOMY
    Romania’s economy will be, this year as well, influenced by global
    uncertainties triggered by inflation, the escalation of the war in Ukraine, the
    energy crisis and problems in supply chains. This is one of the conclusions of
    a report on financial stability, made public by the National Bank of Romania. The
    report also mentions a systemic risk entailed by delays in reforms and in
    spending EU funds. On the other hand, the central bank calls on Romanians to be
    cautious with respect to residential real estate loans, as the high inflation
    triggers risks of default.


    PHARMACEUTICALS Romania obtained from Brussels a 3-month suspension of
    exports for certain drugs, particularly in the antibiotics and oral antipyretic
    categories. According to Bucharest, the measure is designed to ensure the
    availability of such medication for Romanian patients, as the country is
    struggling with a wave of viral respiratory infections.


    MILITARY Over 100
    troops from the US 1-26 Infantry Battalion are training with Romanian troops
    from the Sf. Andrei 300 Infantry Battalion in Galaţi until March this year. According
    to the Romanian defence ministry, the US troops were deployed late last year to
    the Mihai Kogălniceanu air base, and as of this week they were relocated to Galaţi.
    The goal of the joint training scheme is to practice working techniques,
    tactics and procedures, and to enhance interoperability in line with NATO
    requirements.


    DAVOS The international community cannot afford a strategic
    ambiguity regarding the war in Ukraine, the Romanian foreign minister said at
    the World Economic Forum in Davos. He mentioned the seriousness of the security
    crisis and the main risks and challenges for the international system, and
    emphasised the need to maintain a world order based on rules, supporting peace
    and facilitating solutions to global problems. The Romanian official also
    highlighted Romania’s efforts to support Ukraine, such as receiving over 3.3 million
    refugees and the transit of over 11 tonnes of Ukrainian grains and agricultural
    products, as well as the need to continue supporting this country. Mr. Aurescu had
    a number of meetings with representatives of the business communities in Canada
    and Portugal, with whom he discussed issues related to the energy sector in
    particular. (AMP)

  • January 3, 2023 UPDATE

    January 3, 2023 UPDATE

    IMF The IMF expects 2023 to be tougher than
    2022 for most of the global economy. The main economic growth engines, namely
    the United States, the European Union and China will see their economic
    activity slow down, so that 2023 will be difficult for the global GDP, the head
    of the International Monetary Fund (IMF), Kristalina Georgieva, told the
    American TV station CBS. In October, the
    IMF downgraded its global economic outlook for 2023, following the war in
    Ukraine, sharply rising interest rates and inflationist pressure. Georgieva
    said that China, which sees a surge in COVID-19 cases following the dismantling
    of its strict zero-COVID policy, may have its economy affected. Meanwhile,
    the EU has been especially hard hit by the war in Ukraine, with half of the
    bloc expected to be in recession this year, Georgieva said. Also, the global
    growth rate will slow down from 3.2% in 2022 to 2.75 this year, while
    governments will have to make sure they have sufficient revenues for
    expenditure, as they will no longer be able to borrow money in advantageous
    conditions. As regards Romania, the economic growth rate will slow down to 2.8% this year, from more than 5% in 2022.


    NATO NATO allies will discuss, in the
    upcoming months, about the share earmarked for defence, given that some of them
    have requested that the current 2% share of national output to be the minimum
    target spent on defence, NATO Secretary General Jens Stoltenberg told the
    German news agency DPA. The chief of the Alliance also said he would chair a
    number of meetings on this topic, and that his goal was to reach an agreement
    ahead of the next summit in Vilnius in July 2023.




    SURVEY 2023 starts on a pessimistic note for
    most Romanians, according to a survey conducted by the Romanian Institute for
    Evaluation and Strategy. More than half of the participants in the poll believe
    2023 will be worse for Romania than the year before. Active people aged 36 to
    65 are the most pessimistic, while the less educated respondents are more optimistic
    in this respect. In terms of living standards, half of respondents have little
    expectations from the year that has just started. People aged over 51, with
    monthly revenues below 400 euros, have the darkest view of the future. Unlike
    them, those with incomes above 800 euros a month say 2023 will be the same as
    2022. However, the most optimistic in terms of financial future are young
    people aged below 35. As for the changes they would like to see in their
    country, most respondents indicated the politicians, the political class or the
    country leaders, followed by the Government and the ruling parties.


    CORRUPTION The European Parliament has
    launched an urgent procedure to wave the immunity of two members of the
    European Parliament – Italian Andrea Cozzolino and Belgian Marc Tarabella,
    following a request from the Belgian judicial authorities. A number of current
    and former European officials or employees are investigated in this case. The
    scandal began in December, with the arrest of the Greek MEP Eva Kaili, who is
    accused of accepting large sums of money to peddle influence for Qatar and
    Morocco at the European Parliament.


    FOOTBALL FIFA will ask every country in the
    world to name a stadium in honour of Pelé, said FIFA president Gianni Infantino,
    attending the funeral in Santos, Brazil. Edson Arantes do Nascimento by his
    real name, Pelé, the only footballer who won three world titles, died aged 82.
    Throughout his career he scored almost 1,300 goals. He was designated
    footballer of the 20th century by the International Olympic Committee in 1999,
    Player of the Century by FIFA in 2000 and won the Golden Ball. (EE, AMP)

  • The EBRD improves estimates for Romania

    The EBRD improves estimates for Romania

    Romanias economy evolved in the first half of the year much better than expected. This is confirmed by the latest EBRD report, which shows that after a 5.9% rebound in 2021, boosted by private consumption, the GDP registered a surprising growth of 5.8% in the first months of 2022. The international financial institution says that all private consumption, especially of services, was the trigger of growth this time as well, being stimulated by the removal of restrictions related to the pandemic. The GDP growth for the whole of 2022 is estimated somewhere at 5.4% and follows the trend recently indicated also by the assessment mission carried out by the IMF in Romania. The IMF estimated a growth rate of the Romanian economy of 4.8%, higher by more than 2%.



    Things will look completely different next year, though, the European Bank for Reconstruction and Development officials believe. For 2023, the bank estimates an economic growth rate of only 1.9%, which was itself revised upwards from the May estimate. The spring estimates showed that Romanias Gross Domestic Product was to report an increase of 2.9% in 2022 and a contraction of 1.1% in 2023. The EBRD puts the blame for the modest growth forecast for next year mainly on the deterioration of household incomes and on financing and energy costs, which constrain investments. Adding to this is the weak external demand, particularly from Germany, the EBRD report shows.



    At the same time, financial experts even warn that there are still risks of a decline in Romanias economy, in the event of a more serious recession than expected in the euro zone. The EBRD shows that in all three EU member states in Southeastern Europe – Romania, Bulgaria and Greece – which recorded solid economic growth in the first half of 2022, signs of a significant slowdown are beginning to emerge. Inflation has reached two-digit figures, and uncertainty about energy supplies in the coming months is affecting confidence and investment.



    The international financial institution estimates that economies in its region of activity will register growth of 2.3% in 2022, above its May forecasts, thanks to solid activity in the first half of the year, when households spent the savings accumulated during the pandemic quarantines, despite a decline in real wages. However, the reduction in Russian gas supplies led the EBRD to reduce its growth forecasts for next year to 3%, from 4.7% as previously estimated. Ukraines GDP is estimated to contract by almost one third in 2022, while Russias economy is expected to shrink by 5%, instead of the 10% as the EBRD had previously estimated. (LS)

  • Deficit down, growth forecast up

    Deficit down, growth forecast up


    Statisticians are providing reasons for optimism at a time when we most need them. The first is that Romanias budget deficit for the first eight months of the year dropped compared with the same period last year from 3.3% to 2.4% of GDP. After the first seven months of the year, the deficit was at some 2% of GDP. Budget revenues went up 20% compared with last year to reach almost 300 billion lei, the equivalent of 60 billion euros. Budget spending amounts to 330 billion lei, up compared with last year by 17%. According to the finance ministry, the growth is mainly the result of an increase in social assistance spending, local budget and the cost of goods and services. The deficit target for this year is 5.8% of GDP.



    Another cause for moderate optimism is the upwardly revised forecast of the International Monetary Fund with respect to Romanias economic growth this year, which may reach 4.8%, up more than 2% compared with the previous estimate. The new figure was published after an assessment mission carried out by the IMF this summer. According to the finance ministry, the Funds experts highlighted the need to implement macroeconomic policies to ensure stability and stimulate structural reforms with a view to supporting economic growth, and the adjusted figure is validation of the governments efforts.



    The upwards revision of the IMF forecast together with statistics regarding the evolution of the Romanian economy in the first half of the year and other signals on the local and international market show that the impact of the measures taken by the government is the right one from a macroeconomic perspective, says finance minister Adrian Câciu. He added, however, that this is not enough and that Romania must continue to promote a series of reforms, including that of the social security system. The minister gave assurances that the reforms in the National Recovery and Resilience Plan are on track and will also help ensure macroeconomic stability, alongside public investments and budget consolidation.



    On the other hand, it is necessary for the government to solve the pay gaps, make the economy more competitive and give a new impetus to exports in order to counteract the rising inflation rates. The finance minister promised that in the short term, the government will act so as to protect vulnerable categories from the energy crisis and the price hikes. The coalition dominated by the Social Democrats and the Liberals is already having talks on increasing pensions and the minimum wage. Commentators are saying that the percentage of the rise will have a strong political connotation and will be reflected on the budget deficit at the end of the year. (CM)


  • Romania reports surprising economic growth

    Romania reports surprising economic growth

    Romanias economy grew by 5.8% in the first semester of this year, compared to the same period of 2021, the National Institute of Statistics announced, thus taking experts by surprise. At the same time, in the second quarter, the Gross Domestic Product recorded an appreciation of 2.1% compared to the previous quarter. Finally, compared to the same quarter of 2021, the GDP increased in the same period of 2022 by 5.3%. The good news was also confirmed in Brussels: Romania recorded, among the EU member states for which data are available, the second most significant economic growth in the second quarter of 2022, as compared to the previous three months, of 2.1 %.



    Only the Netherlands, whose growth was in the same range, had a bigger growth rate of 2.6%. Economic growth was also registered in Sweden, Spain, Hungary and Bulgaria, while decreases in the economic growth rates were recorded in Poland, Latvia, Lithuania and Portugal. As compared to the second quarter of last year, the GDP increased by 3.9% in the euro zone and by 4% in the European Union between April and June 2022, with all EU member states for which data are available reporting increases. Eurostat confirms, in the case of Romania, the annual growth rate of 5.3% in the second quarter of 2022, after an annual growth of 6.4% in the first three months.



    The economy grew steadily in the second quarter, despite pessimistic expectations, Ziarul Financiar reports, noting, however, that, lately, economists have shown that they like being taken by surprise. Institutions that conduct economic analyzes have increased the growth forecasts for the Romanian economy in recent months. For instance, the European Commission, in the summer forecast, had increased the estimate for the entire year 2022 from 2.6 to 3.9 %, thanks to the solid growth in the first quarter, the previously quoted publication writes. The biggest surprise is the 2.1% growth in the second quarter, according to analysts. “With everything that is happening around us, it is an exceptional result”, economist Aurelian Dochia told Ziarul Financiar.



    “It is a very big surprise for us too, but the surprise is even bigger for the market”, says Ionuţ Dumitru, the chief economist of an important private bank. Industry, which accounts for 20 % of GDP, is reporting loss in mid 2022, the constructions sector is barely moving, agriculture, due to the drought, will have a negative contribution to the GDP, and household consumption has increased by a little over 3%. So, what is the explanation for growth? Ziarul Financiar asks. Economist Laurian Lungu believes that the main effect comes from the price index and, partially, from investments. The important thing is what will happen in the second part of the year, Laurian Lungu thinks. He estimates that the economy has not entered a period of contraction, though, even if people received employment contracts, wage increases are below the level of inflation, which has reached almost 15%, and will affect consumption. (LS)