Radio România Internațional

Tag: forecasts

  • September 26, 2024 UPDATE

    September 26, 2024 UPDATE

     

    FLOODS The Danube flood tide is expected to reach Romania on October 2-3, when the river flow rate is expected to reach 9,500 cubic metres per second, the manager of the Romanian Waters National Agency, Sorin Lucaci, announced. The Emergency Directorate announced measures have already been prepared, and will be adjusted to the new circumstances triggered by the heavy rainfalls announced for this weekend. The Emergency Directorate chief, Raed Arafat, said at the end of today’s Cabinet meeting that citizens will be kept informed, including through the Ro-Alert emergency service, and that local authorities have been instructed to identify vulnerable citizens and to plan for their timely evacuation. The Danube has so far caused major floods in the countries it transits, as Storm Ashley has hit Europe, bringing low temperatures, strong wind and massive rainfalls.

     

    UN Insecure as today’s world may be, the answer to our problems will always be more cooperation and more solidarity, said Romania’s president Klaus Iohannis in his address at the UN General Assembly on Wednesday. He also highlighted Romania’s efforts and contribution to solving current global challenges, from security crises such as the war in Ukraine and the Middle East conflict to the major challenges facing the world. Iohannis pointed out that security is not a regional, but a global matter, and that the war waged by Russia in Ukraine has affected nations and people around the globe.

     

    ECONOMY The European Bank for Reconstruction and Development significantly revised downwards its economic growth forecast for Romania this year, as the lower outsourcing demand has hit the IT sector, according to a report released on Thursday. The EBRD expects Romania’s GDP to grow by 1.4% this year, down from its previous estimate of 3.2% in May. For next year, the EBRD expects a 2.6% growth rate, down from the 3.4% figure proposed in May. The increase in the minimum wage in Romania and Bulgaria has stimulated demand but led to a growth in the trade deficit and added to inflationist pressure, the report also says. The EBRD mentions that the latest forecasts of the Tax Council in Bucharest indicate an increase in the budget deficit to around 8% of GDP this year. The International Monetary Fund also revised downwards its forecast concerning Romania’s economic growth this year, from 3.8% last October to 2.8% in its World Economic Outlook released in April this year. Last week, the National Commission for Strategy and Prognosis revised its estimates concerning the GDP growth down to 2.8% from 3.4% previously.

     

    EU The European Commission has initiated 2 infringement procedures against Romania, and requests notification on the progress in implementing 2 directives. The infringement package targets 26 member states, with Denmark as the exception. The first procedure against Romania concerns its failing to fully transpose into national law the provisions of the revised Renewable Energy Directive related to the simplification and acceleration of permitting procedures. Romania and the other 25 notified states should have transposed the directive by July 1, 2024. The second notification, received by a total 17 member states, has to do with failing to notify their national measures transposing the Accounting Directive, the Transparency Directive and the Audit Directive. The deadline was July 6, 2024. In both cases, Romania has 2 months to fully transpose the directives and to notify the European Commission.

     

    IMMIGRATION Romania is becoming more and more attractive to foreign workers, according to a survey conducted by the Foundation for the Development of Civil Society. The home countries of most foreign workers in Romania include Nepal, Turkey, Italy, Moldova, Sri Lanka and India. They work in constructions, the hospitality industry and retail, and according to the Immigration Inspectorate General 80% of them get unskilled jobs. Integrating foreign workers is not easy, but it is important for Romania’s economic development, says the head of the EU representative office in Romania, Ramona Chiriac. She said foreign workers are facing language barriers and abuse by employers. In this respect, several ministries are working together on legislation to help immigrants, the PM’s office has announced. In 2023, the number of foreign workers employed in Romania was 200,000.

     

    BUSINESS Members of the Romanian business community complain that, in spite of their investments in dual education, many of the youth completing such programmes leave the country. The deputy chair of the Romanian Association of Small and Mid-sized Traders, Feliciu Paraschiv, says there are no guarantees that those who provide financial support to a student for 2-3 years will eventually benefit from the knowledge they have gained, and that Romanian entrepreneurs end up training the future employees of more developed countries. Paraschiv believes education institutions should be more connected to the actual demand in the economy and highlighted the need for a change in the public perception of certain jobs.

     

    CITIES The city of Braşov, in central Romania, is viewed as the most attractive city to live in, according to an urban attractiveness survey conducted by the Institute for Visionary Cities. Braşov is followed by Cluj-Napoca and Oradea, in the north-west, Sibiu, in the centre, Timişoara (west), Constanţa (south-east), the capital city Bucharest, Iaşi (north-east), Alba Iulia (centre), and Piatra Neamţ (north-east). The survey looks at moving plans and the overall perception of the quality of life. The authors highlighted that leisure opportunities have proved to be the most important element for interviewees, overshadowing traditional factors such as well-paying jobs and infrastructure. The latter still ranks second, followed by a city’s capacity to encourage creativity and innovation.

     

    TENNIS The Romanian tennis player Irina Begu Thursday defeated China’s Ye-Xin Ma, 1-6, 6-4, 6-1, in the WTA 1000 tournament in Beijing. Begu (34, ranked 103rd WTA) is next to take on seed no. 17, Mirra Andreeva (Russia). In the same competition, another Romanian player, Jaqueline Christian, defeated Ana Bondar (Hungary), 1-6, 6-7, whereas Gabriela Ruse lost to Sijia Wei (China), 4-6, 6-7. (AMP)

  • Key Interest Rate stays at 7%

    Key Interest Rate stays at 7%

    Romania’s Central Bank has kept the
    key interest rate at 7% this year, a measure taken at a time when the latest
    data released shows a lower economic growth in the last three months of 2023.
    The interest rates at which the commercial banks can borrow from the central
    bank have also been maintained as well as those they have when they keep their
    deposits in the Central Bank. The key interest rate hasn’t changed since
    January last year, when it went from 6.75 to 7%.

    The Central Bank’s present
    forecast shows a rise in the annual inflation rate at the beginning of the year
    under the impact of the introduction and rising of indirect taxes and duties.
    After this the inflation rate is expected to come back to a downward trend at a
    slower pace though as compared to both 2023 and the previous forecasts. According
    to central bank experts, future fiscal and income policies, the effects of the
    war in Ukraine and the Middle East conflict as well as the developments in
    Europe, particularly in Germany, represent other uncertainties and even risks
    concerning the inflation rate. In another development the current account of
    the balance of payment has registered a deficit of nearly 22.7 billion euros,
    3.3 billion less than that registered in 2022, says data released by the Central
    Bank. This reduction was mainly due to
    the fact that the balance of goods registered a deficit lower by nearly 3
    billion Euros while the balance of services saw a surplus of more than 204
    million. Here is financial analyst Adrian Codirlasu with more.




    Adrian Codirlasu: If we take the component of the current
    account deficit we see that on the goods side imports went down a little bit,
    actually the prices of imported goods went down. For instance the prices of the
    imported goods based on intensive energy consumption went down as energy prices
    also decreased. In terms of services, the biggest rise was seen in the
    transport sector. Against the background of the war in Ukraine, we are helping this
    country to export its products and we see that we are also getting profit from
    this activity. We have surplus in the service sector but the highest
    contribution to this surplus came from the transport section.


    Direct foreign investment in Romania last year
    stood at nearly 6.6 billion Euros as compared to 10 billion in 2022. According
    to the Central Bank, in 2022, the total foreign debt rose by nearly 25 billion Euros
    up to roughly 169 billion.

    (bill)

  • Assessments by the National Bank

    Assessments by the National Bank

    The National Bank of Romania has revised upward, to 7.5%, the inflation forecast for the end of this year, according to the new estimates presented, on Wednesday, by Governor Mugur Isărescu. The initial forecast was 7.1%. At the end of next year, the inflation rate is expected to be 4.4%. According to the basic scenario, the annual inflation rate will continuously decrease until the projection horizon, i.e. June 2025, but at a relatively slower rate. Mugur Isărescu pointed out that only some increased taxes lead to an increase in inflation, namely the direct taxes on consumption, excises and VAT.



    “Increasing income taxes, for example, can even have the opposite effect. It is more difficult to calculate the increase in income taxation. It leads to a decrease in aggregate demand”, the governor of the BNR explained. According to the presentation, the basic scenario was built on the basis of the legislation in force at the time of the projection and does not include the impact of the fiscal consolidation measures recently discussed by the authorities.



    The governor of the BNR also showed that both economic growth and consumption are showing signs of slowing down: “We have economic growth, but significantly weakened for this year, compared to what we thought would happen at the beginning of the year. We have an increase in the annual rate of population consumption at T1. This surprised us too, a little. We had an increase in consumption coming from incomes, but we are noticing a softening of consumption. This attenuation is extremely visible, it is probably related to the populations term deposits. They increased significantly during this period, categorically also due to higher interest rates, therefore, lower consumption leads to higher savings”.



    In this sense, Mugur Isărescu stated that Romania must have an economic growth based less on consumption and more on investments. Attracting European funds, he emphasized, is essential from this point of view. At the same time, Mugur Isărescu said that the National Bank fully supports a government program of fiscal adjustment and consolidation. He emphasized, however, that the decision to be made should be political, not fiscal.



    Also on Wednesday, the National Institute of Statistics — INS announced that the trade balance deficit in the first half of this year was over 13.3 billion Euros, about 2.1 billion Euros lower than the one recorded in the first half of last year. According to the INS, between January 1 and June 30, 2023, important shares in the structure of exports and imports are held by such product groups as machines and transport equipment, namely over 45% for exports and about 36 % for imports, as well as other manufactured products. (LS)

  • 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 16, 2022 UPDATE

    May 16, 2022 UPDATE

    NATO — The Romanian President Klaus Iohannis hails Swedens decision to apply for NATO membership, following the announcement made on Monday by Swedish Prime Minister Magdalena Andersson. In a Twitter message, president Iohannis states that Romania fully supports a rapid process of Swedens accession to the North Atlantic Alliance. He adds that, once they join the Alliance, Sweden and Finland will make NATO stronger than ever before. The two countries in northern Europe, located near Russia, have decided to go out of neutrality and demand to be admitted into NATO after Russia attacked and invaded Ukraine almost three months ago. NATO currently has 30 member states, 21 of which are part of the EU. The EU member states that have not joined the North Atlantic Alliance are Austria, Cyprus, Finland, Ireland, Malta and Sweden.




    Forecast — Romanias Gross Domestic Product (GDP) will grow by 2.6% this year and by 3.6% in 2023, according to the European Commissions spring economic forecasts. This is a smaller increase than expected in the previous assessments, in February. The situation is valid for the whole of the European Union and is mainly due to the disruptions caused by the war waged by Russia in Ukraine. European Commissioner for the Economy Paolo Gentiloni has announced that the European average inflation rate will be 6.8% this year. He also said that in April European inflation averaged 7.5%, the highest value ever recorded in the monetary union. According to the Commission, inflation in Romania will reach 8.9% this year, double the percentage reported in 2021. Inflation is expected to fall to 5.1% next year, but the Commission warns that there are growing economic risks as the war in Ukraine is prolonged.



    Visit — A delegation of the Romanian Interior Ministry led by minister Lucian Bode pays an official visit to the US between May 16-18, on the occasion of the 25th anniversary of the launch of the Romania-US Strategic Partnership. The Romanian official is to have meetings at the Department of State, the Department of Homeland Security and the US Congress. The discussions with the US officials focus on institutional efforts in line with the State Departments recommendations made in the Trafficking in Persons Report (TiP Report), Romania having the necessary tools for an adequate response to the challenges posed by this type of crime, namely structures, legislation, strategies and action plans, informs the Interior Ministry. The meetings are an opportunity to reconfirm the very good cooperation between the Romanian authorities and the US law enforcement agencies in the field of combating organized crime, with a focus on combating illegal migration and cybercrime, as well as intensifying the exchange of information. During the talks with members of the US Congress, Lucian Bode will discuss the challenges of the current regional context, both in terms of managing the humanitarian crisis generated by Russias aggression against Ukraine and in terms of security.



    Tennis — Polands Iga Swiatek leads the world ranking of professional tennis players (WTA), published on Monday. Next in the ranking are the Czech Barbora Krejcikova and the Spanish Paula Badosa. The Romanian Simona Halep returned to the Top 20, climbing two positions compared to last week, from 21 to 19 position. Romania has six players in the top 100, the other five being Sorana Cîrstea – 27, Gabriela Ruse – 52, Irina Begu – 62, Jaqueline Cristian – 69, Ana Bogdan – 91. In the doubles ranking, Romania has five representatives in the first hundred: Monica Niculescu – 40, Raluca Olaru – 47, Irina Begu – 57, Irina Bara – 59, Gabriela Ruse – 87.



    Football — CFR Cluj (northwest) won its fifth consecutive title as Romania’s football champions, after defeating the Universitatea Craiova (south), score 2-1, at home, in a match from the 9th stage, the penultimate of the First League play-offs. The vice-champion is FCSB, from Bucharest. On Thursday, Sepsi OSK Sfântu Gheorghe (center) and FC Voluntari (south, a satellite city of Bucharest) will play the final of the Romanian Football Cup. At the end of the domestic season, the Romanian national football team will have their first match in a new edition of the League of Nations, at the beginning of June, when it will meet the national teams of Montenegro, Bosnia and Finland. (LS)

  • Economic effects of the corona crisis

    Economic effects of the corona crisis

    The pandemic triggered a substantial contraction of the Romanian economy in the first half of the year. According to the National Statistics Institute, in the second quarter the GDP was 12.3% lower than in the previous quarter.



    All economic sectors contributed to this result, with important negative effects coming from the industry, whose output dropped around 14%, from cultural and entertainment activities, from appliance repairs and other services, whose volume fell by nearly 30%.



    Increases have been reported in constructions, information and communications, public administration and defence, social security, education, healthcare and social assistance. The finance minister Florin Cîţu expects the domestic economy to see limited growth in the third quarter and thus to avoid technical recession, i.e. 2 consecutive quarters with decreasing GDP. He adds that in the next quarter, the highest risk is the contribution of agriculture to the GDP, but he also emphasises the positive role of investments.



    Even so, economic analyst Aurelian Dochia believes the GDP drop by the end of the year is rather unlikely to be only 4%, as the government forecasts.



    Aurelian Dochia: “Statistics confirmed that in the first half of the year Romanias economy saw a sizeable contraction, as did many European economies and economies in other parts of the world. It is hard to believe that by the end of the year things will improve to such an extent as to lead to a year-end contraction of under 4%, as the government forecasts, because we have to make up for a 10% drop. This is by no means easy, given that the fears that keep the economy on hold are still considerable, and that the European economy and the economies of Romanias key partners, first of all of Germany, are not likely to bounce back very quickly, in spite of some signs of recovery. So for the entire year, Romanias GDP might drop by a total 5-6%.



    In the same context, an analysis run by the National Statistics Institute shows that over one-third of Romanian households have had difficulties, or even serious difficulties, meeting current costs of living, and if we add those who admitted slight difficulties in covering these costs, we get a total of 77% of the families in Romania. According to the survey, only for one in five households current expenses do not raise any special problems. More than half of households say the incomes required for covering current expenses should be over 600 euro, the survey also indicates.


    (translated by: A.M. Popescu)

  • Economic assessments and forecasts

    Economic assessments and forecasts

    Romania has constantly made up for the gaps that used to separate it from the developed nations, a process that was not even halted by the global financial crisis, the vice-governor of the National Bank of Romania, Liviu Voinea, told a conference about the country’s 10-year membership of the European Union held in Bucharest. He explained that, as far as the monetary policy is concerned, Romania has no other option but to join the eurozone, which has been one of this country’s aims ever since it joined the Union.



    Liviu Voinea: “Romania’s place is in the eurozone. The decision to adopt the euro was already taken when we joined the European Union. Adopting the euro is not, however, a universal remedy. It will not ensure the country’s prosperity by itself. It is for us to ensure our own prosperity before joining the eurozone. We need to continue structural reforms before adopting the euro so we can reach a higher level of convergence in terms of incomes and economic structure and move closer to the conditions of an optimal monetary area.”



    Voinea explained that joining the eurozone is not merely about using a different currency, but involves a complex process with diverse and profound implications that can only be triggered through a political decision based on wide consensus in society. Deputy Chief of Mission with the US Embassy in Bucharest Dean Thompson, who attended the conference, said Romania is very stable on the current financial market. The current framework, he added, will attract the foreign investment the country needs, while also giving it the possibility to absorb the European funds available in the 2014-2020 period.



    In Thompson’s opinion, Bucharest must encourage its citizens who now live and work abroad to invest in their home country by creating a fair and competitive environment, devoid of corruption. He said he was confident that the infrastructure will be created that will allow Romania to become a leader on the European energy market. Achim Tröster, the Deputy Head of Mission of the German Embassy in Bucharest, also believes Romania still has a big growth potential, which needs, however, to be cultivated.



    He said Germany wants Romania to become a stronger and more modern partner and one that would actively contribute to the consolidation and future of the European Union. In another move, a report by KeysFin, a business information service based in Bucharest, shows that Romanian agriculture is becoming increasingly profitable. Business in the cereal sector has doubled in Romania in the last seven years to account for around 3.5 billion euros in 2015. More than 7,000 businesses employing over 40,000 people are active on this market at the moment. Compared with 2009, the number of such businesses has grown by almost 30%. The report shows that, according to the latest figures published by the European Commission, at the end of May this year, Romania was the main exporter of cereals in the Union.