Radio România Internațional

Tag: growth

  • 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)

  • Budget for 2025, promulgated

    Budget for 2025, promulgated

     

    The outgoing president Klaus Iohannis signed the decrees promulgating the 2025 state budget and social security budget laws. The two bills had been quickly endorsed last week in the joint plenary meeting of the Romanian parliament. MPs in the opposition—AUR, Save Romania Union, SOS Romania and the Young People’s Party—submitted thousands of amendments, but these were dismissed one by one by the vote of the ruling coalition, comprising the Social Democratic Party, the National Liberal Party and the Democratic Union of Ethnic Hungarians in Romania.

     

    The opposition claimed that many amendments were rushed away without careful consideration. The budgets of ministries, on the other hand, were adopted as received from the reporting committees, and one of the few amendments to pass concerned an increase in the funding of the health ministry. Another amendment scrapped the approx. EUR 140,000 originally earmarked to the Constitutional Court of Romania for covering medical prescription claims for employees and retired judges.

     

    The draft budget for 2025 was passed by the government on February 1 and is based on a 2.5% economic growth rate and a budget deficit of 7% of GDP. The 2025 budget will enable the country’s development process to continue, PM Marcel Ciolacu said. He emphasised that higher amounts have been earmarked for the health ministry, for motorways and railways, as well as for education, and he dismissed the idea of ​​an austerity budget.

     

    In turn, the finance minister Tanczos Barna described the state budget for 2025 as “modest” and based on a prudent increase in revenues, “without exaggeration.” He claimed that there is “enough money for salaries, pensions and social benefits”.

     

    The budget was criticised not only by the opposition, but also by employers and trade unions, while Fiscal Council experts said that revenues were overestimated.

     

    The 2025 budget was finalised after late last week an IMF delegation completed its talks in Bucharest with the main institutions responsible for Romania’s monetary and fiscal policies. It was not an assessment mission, but only a fact-finding one, and PM Marcel Ciolacu assured the IMF of the government’s determination to comply with the budget deficit target of 7% of the GDP and to implement the reforms undertaken in the National Recovery and Resilience Plan.

     

    The IMF made public its latest forecasts regarding the Romanian economy last autumn, when it estimated a 7% deficit for the end of 2025, the same as predicted by the Government. The IMF estimates are, however, more optimistic both in terms of the economic growth rate (3.3%, compared to only 2.5% forecast by Bucharest) and inflation (3.6%, below the 4.4% target set by the government). (AMP)

  • 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

    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 23, 2024 UPDATE

    December 23, 2024 UPDATE

     

     

    GOVERNMENT The new government in Bucharest, headed by the social-democrat Marcel Ciolacu and made up of the pro-European parties PSD, PNL, UDMR and the group of the national minorities has got the investiture vote in Parliament. All the 16 members proposed to become part of the new Executive on Monday got the greenlight following the hearing in the Legislative’s specialized committees. The Prime Minister had said the new government would not resort to austerity measures, but public spending must be decent. The PNL interim leader Ilie Bolojan said that his party signed the agreement to form a stable government, which will carry out reforms during a difficult period. He announced that former Liberal leader Crin Antonescu is the coalition’s joint candidate for the upcoming presidential election. The UDMR president Kelemen Hunor says the current coalition seeks to gain people’s trust in order to overcome the political deadlock. However, the AUR MPs believe the programme presented by the PSD leader is unrealistic and the USR representatives say the new government does not meet the citizens’ expectations. Previously, the leaders of PSD, PNL, UDMR and the leader of the group of national minorities signed a political agreement to form a Parliament majority and a government.  According to Romania’s president Klaus Iohannis, the new pro-European coalition stands good chances of continuing Romania’s good track record, following the undeniably good economic results obtained and the Schengen accession.

     

    DAY In a message conveyed on Revolution Victory Day, President Klaus Iohannis said that Romania is “at a turning point” and must firmly reject attempts to revise history, which aim to “defame the memory of the heroes of democratic Romania and mystify the truth about the dictatorial regime”. The head of state pointed out that the freedom for which the heroes of the Revolution sacrificed themselves is “more alive and present than ever” today, 35 years on. A number of events were held throughout the country to mark the anti-communist revolution of 1989, with participants recalling protesters’ aspirations back then for democracy and a European path for Romania.

     

    PARLIAMENT PSD MP Ciprian Șerban was on Monday elected Speaker of the Chamber of Deputies in the new Parliament. The interim leader of PNL, Ilie Bolojan, was elected Senate Speaker. We recall that four pro-European parties entered Parliament – ​​PSD, PNL, USR, UDMR – and three self-proclaimed sovereignist parties, AUR, SOS Romania and POT.

     

    FORECAST The National Strategy and Forecast Commission has significantly downgraded its economic growth forecast for 2024 from 2.8% previously to 1%, amid an accelerated decline in activity, especially in industry and agriculture. The only sector with a positive estimated impact was services. In its autumn forecast, published in November, the European Commission estimates that the Romanian economy will report an economic slowdown this year, up to 1.4%, but the gradual recovery of external demand, the easing of financial conditions, resilient private consumption and an acceleration of investments will support economic growth up to 2.5% in 2025 and 2.9% in 2026.

    (bill)

  • The Romanian economy at the start of 2024

    The Romanian economy at the start of 2024


    Last year the Romanian economy went up 1.8%, which is however 0.8% less than estimated, reads a recent World Bank report. Also, in January – November 2023, Romanian exports totalled nearly EUR 87 bln, and imports over EUR 112 bln. In other words, exports rose by 2% while imports dropped by over 3% compared to the corresponding period of last year, according to data made public by the National Statistics Institute.



    Even so, the trade deficit exceeded EUR 25 bln last year, in spite of getting more than EUR 5 bln smaller. The economic analyst Constantin Rudniţchi says the deficit primarily narrowed due to the drop in the prices of the energy imported by Romania and to a slow-down in consumption:



    Constantin Rudniţchi: “The good news, if any, is that the trade deficit for the first 11 months of last year dropped compared to the previous year. This decrease is owing to a slow-down in consumption, because, lets not forget, some of the trade balance deficit comes from consumer goods. Obviously, some other part of the deficit is due to industrial goods, but consumer goods have their contribution to the deficit. So on the one hand we saw a decrease in consumption, and implicitly in the deficit. And on the other hand, we have reason to hope (because we dont have all the data yet), the Romanian economy is beginning to produce more goods that are used domestically.”



    The analyst Constantin Rudnițchi believes that, for the trade deficit to keep its encouraging trend, public policies are needed which focus on major sectors, such as the foodstuffs, chemical products and the automotive industry.



    As for the future, the World Bank adjusted downwards its estimates on the Romanian economy, predicting a GDP growth by 3.3% and 3.8% in 2024 and 2025 respectively. In fact, according to the World Bank, the global economy will slow down for the 3rd consecutive year, to 2.4% – the slowest pace since the Covid-19 pandemic. For 2025, the global economic growth is expected to reach an encouraging 2.7%, but even in this case a downward adjustment was operated from the 3% estimate made public last June, especially because of the downturn experienced by the worlds most advanced economies.



    Under these circumstances, the goal of ending extreme poverty by 2030 seems impossible to reach, the World Bank concludes. One way to encourage economic growth, especially in emerging and developing countries, the institution says, is to step up investments in clean energy and adapting to climate change. (AMP)


  • January 10, 2024

    January 10, 2024

    Economy – The Romanian economy grew by 1.8% last year, by 0.8 % less than previously estimated, shows a World Bank report. The report also revised downwards the estimates regarding the evolution of the Romanian economy in 2024 and 2025, when the growth rate of the Gross Domestic Product would be 3.3% and 3.8%, respectively. According to the World Bank, the world economy will slow down for the third consecutive year, up to 2.4%.



    Partnership – The Romanian Prime Minister, Marcel Ciolacu, congratulated Gabriel Attal on his nomination to the position of Prime Minister of France. The Romanian PM states that he is ready to work together with his new counterpart to strengthen the Romanian – French strategic partnership. Attal, a former Education Minister, was appointed by President Emmanuel Macron to form the new government of France, after the former Prime Minister Elisabeth Borne resigned. At 34, Gabriel Attal, with studies in political sciences, becomes the youngest prime minister in the history of France, according to Radio Romania’s correspondent in Paris.



    Free travel – Almost 2,000 young Romanians aged 18 will receive a free travel permit to explore the diversity of Europe, as part of the DiscoverEU initiative, a program funded by Erasmus+. They will travel mainly by train between March 2024 and May 2025, to learn new things about the history and cultural heritage of Europe and meet people from all over the continent. So far, over 11,600 young Romanians have benefited from such a travel permit.



    Water polo — Romania’s national mens water polo team won Group D of the European Championship in Croatia, after defeating the Slovakian team, score 8-7, on Tuesday evening, in Dubrovnik. In the previous matches, the Romanians defeated the Netherlands and Slovenia. They will play a play-off match for qualification for the quarterfinals against Group B bottom-placed team, Georgia, in Zagreb, on Thursday. At the European Womens Championship, organized in the Netherlands simultaneously with the mens, Romania ranked 14thout of 16 participating teams.



    Flu – At least nine people sick with the flu have died since the beginning of this cold season in Romania. The Romanian Health Ministry announces that there is currently no flu epidemic in the country, but medical units are facing an accelerated increase in the number of respiratory viruses’ cases, especially flu. The situation is also complicated by the acute lack of doctors, the expert in health policies, Emilian Imbri, told Radio Romania News and Current Affairs Channel.



    Under financing – Family doctors in Romania point out that their budget allocation has been reduced by 25% in 2024, compared to 2022. They argue that the system is already underfunded and that the decrease in income will further deepen the already existing shortage of family doctors. The president of the national family doctors’ society, Dina Mergeani, states that the permanent centers operate with the doctors’ own money, they have not yet been paid for the October – December period, and the suspension of their activity would block the emergency rooms. (LS)

  • November 16, 2023

    November 16, 2023

    VISIT President Klaus Iohannis today concludes his 3-day visit to
    Kenya, in an African tour that is taking him next to Tanzania. In Nairobi, the
    Romanian official will visit an all-girls school to inaugurate a donation by
    Romania under its development assistance programme. In fact, consolidating
    Romania’s profile as a provider of education and training to African countries
    is one of the goals of the African tour undertaken by president Iohannis. On
    Wednesday, in Kenya, Mr. Iohannis had talks with his Kenyan counterpart William
    Ruto, on which occasion four agreements were signed in the fields of environmental
    protection and climate change, scientific cooperation, food safety and
    diplomatic training. The tour, which also includes the Republic of Cabo Verde and
    Senegal, is the first political and diplomatic initiative at this level in the
    past 30 years, and aims to re-launch Romania’s relations with the countries on
    the African continent.


    PROTEST Around 2,000 people gathered this morning in
    front of the government’s headquarters in Bucharest, in a national protest
    against the public pension system and the recent law on tax-related measures. The
    rally organised by the Meridian National Trade Union Confederation, brought
    together representatives of various public sector staff, from local police to
    civil servants or forestry and agriculture workers around the country. The main
    source of discontent is the bill on public pensions, passed by the Cabinet on November
    9, which according to trade unionists writes off some retirement rights currently
    enjoyed by several personnel categories. On Wednesday employees of Romanian
    public pensions agencies, healthcare agencies and employment agencies temporarily
    suspended work and took to the streets. Healthcare Ministry staff and
    pharmacists are also disgruntled and demand solutions from the government.


    ECONOMY
    Romania will conclude the year with a 2.2% economic growth rate, as against 4.6%
    in 2022, the European Commission’s autumn forecast indicates. Growth estimates
    have been lowered for the entire European bloc. In Romania, the causes include an
    inflation rate above the EU average, low foreign demand and limited financing
    options. The GDP growth rate is expected to reach 3.1% in 2024 and 3.4% in 2025,
    which the 2023 public deficit is put at 6.3% of GDP, instead of the 5.7%
    estimated by the Romanian government. Romania is already subject to an
    excessive deficit procedure and it must narrow the gap between public spending
    and revenues, so as not to lose EU funding.


    CONFERENCE European and Asian media professionals are taking part in
    the Media and Culture Days conference, organised by Radio Romania at the Carol
    I Central University Library in Bucharest. The conference focuses on the key
    role played by public mass media in promoting high-quality cultural content and
    in supporting diversity and inclusion, with special emphasis on local and
    regional communities. At the reception held on Wednesday night at Elisabeta
    Palace, H.R.H. Prince Radu emphasised the historical ties between the Royal
    Family and Radio Romania, two institutions in which Romanians still have
    considerable confidence.



    ISRAEL The UN Security Council has adopted a
    resolution calling for humanitarian pauses in Gaza, AFP reports. The
    resolution, drawn up by Malta and endorsed with 12 members voting in favour,
    none against and three abstentions (Russia, United Kingdom, United States) also
    calls for urgent and extended humanitarian corridors in Gaza for a
    sufficient number of days to allow aid for the civilians there, as well as for
    the immediate and unconditional release of all hostages held by Hamas and
    other groups, especially children. Both Israel and the Palestinian side
    criticised the resolution. The observer for Palestine, Riyad Mansour, said the
    UN should have called for ceasefire instead of only pauses, while the Israeli
    Ambassador Gilad Erdan condemned the resolution as meaningless. On site, Israeli
    fighter jets hit the home of Hamas leader Ismail Haniyeh in Gaza, the Israeli
    army announced today. Haniyeh’s house was used as terrorist infrastructure and
    often served as a meeting point for Hamas’ senior leaders to direct terror
    attacks against Israeli civilians and IDF (Israel Defence Forces)
    soldiers, the Israeli military said. (AMP)

  • November 15, 2023 UPDATE

    November 15, 2023 UPDATE

    ECONOMY Romania will
    see its economic growth slowing down because of the high inflation, according
    to the European Commission’s autumn economic forecast. Romania’s GDP growth has
    been adjusted to 2.2%, as against 4.6% last year, because of an inflation rate
    above the EU average, of the low foreign demand and limited financing options. The
    inflation rate is expected to drop in the next 2 years, restoring the overall economic
    balance. In spite of the moderate economic growth at year end, the labour
    market remains stable. However, significant increases in salaries and pensions
    and the slight increase in governmental spending support a general rise in
    private consumption, although retail and services are on a downward trend and
    the industrial output is decreasing. On the other hand, tighter monetary policy
    and financing conditions have led to a significant slow-down in private sector
    loans, with a negative impact on investments. Romania’s real GDP growth rate is
    expected to reach 3.1% in 2024 and 3.4% in 2025, while the public deficit is
    predicted to stand at 6.3% of GDP this year, 5.3% in 2024 and 5.1% in 2025, as
    a result of the fiscal consolidation measures to be implemented as of January.


    PENSIONS The new pensions law drafted by the government will next
    Monday be discussed in the Chamber of Deputies, which is the decision-making
    body for this piece of legislation, having already been passed by the Senate on
    Tuesday. The parliamentary majority formed by the Social Democrats and the
    Liberals says the law eliminates the inequalities in the system, while the
    opposition condemns the lack of funding sources to sustain the considerable
    pensions increases planned for next year. The new pensions law favours current
    pensioners and penalises those who are still working, the head of the National
    Trade Union Bloc Dumitru Costin said on Wednesday, after analysing the document.
    Costin also warns that the financial impact will be huge, and the extent to
    which it can be covered is unknown.


    PRESIDENT The
    president of Romania Klaus Iohannis Tuesday began his African tour with an
    official visit to Kenya. The tour, which also includes Tanzania, the Republic
    of Cabo Verde and Senegal, is the first political and diplomatic initiative at
    this level in the past 30 years, and aims to re-launch Romania’s relations with
    the countries on the African continent. At a joint press conference on Tuesday,
    president Iohannis emphasised the need for Romania to have its own medium and
    long term strategy for Africa based on concrete collaboration at government
    level, while Kenya’s president William Ruto spoke about the effects of the war
    in Ukraine for the African continent. Four agreements were signed in the fields
    of environmental protection and climate change, scientific cooperation, food
    safety and diplomatic training. On Wednesday, president Iohannis had a meeting
    with Kenya’s secretary for tourism and wildlife, Alfred Nganga Mutua, as part
    of a visit to the Nairobi National Park.


    REPATRIATION The
    foreign ministry in Bucharest said another 17 Romanian nationals and family
    members left the Gaza Strip via the Rafah checkpoint and are on Egyptian territory, waiting to be
    repatriated. The foreign ministry noted the evacuation was the result of
    complex efforts from an inter-institutional crisis cell, the Romanian embassy
    in Cairo and Romania’s Representation in Ramallah. 220 Romanian citizens and
    family members who have been evacuated from Gaza have arrived in Romania.


    AGEING Romania is one of the top 10 countries in the world in terms
    of population ageing rate, which is likely to put tremendous pressure on the
    country’s entire economic system, particularly on its healthcare and pension systems.
    The statement was made on Wednesday at the opening of a specialised congress in
    Bucharest. Sociological research indicates that 55% of the elderly people in
    Romania feel lonely, more than 30% of them only interact with 3-4 people every
    month, and 3 in 10 elderly people have no one to rely on in if necessary.



    MILITARY
    The Romanian Army Wednesday tested the operation of the Patriot surface-to-air missile
    system acquired by the Romanian Air Forces in 2020. The test was part of the PATRIOT
    SPARK 23 tactical exercise held these days at the Capu Midia shooting range in
    the south-east of the country. The Patriot system purchased by Romania is a
    state-of-the-art one, able to identify, track and neutralise any type of air
    threat. Attending the event were the PM Marcel Ciolacu, the Senate Speaker and
    former PM Nicolae Ciucă, and the defence minister Angel Tîlvăr. The Romanian
    Air Forces have so far acquired 3 other Patriot systems, which will be
    operational by the end of next year. Another 3 systems will be delivered to
    Romania under a USD 4 bln agreement. (AMP)

  • 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)

  • August 16, 2023 UPDATE

    August 16, 2023 UPDATE


    SECURITY Romanias security has been consolidated and the efforts to strengthen NATO structures on national territory, especially the NATO battle group established in 2022, will carry on, said President Klaus Iohannis, who attended the Navy Day ceremonies in Constanta on Tuesday. In turn, Prime Minister Marcel Ciolacu promised that the government would earmark the resources required for equipping and modernising the Romanian Naval Forces. Security at the Black Sea ensures the stability of the entire region and turns Romania into an important security provider, the speaker of the Senate, Nicolae Ciucă, also said.



    ECONOMY The EU economy grew 0.5% and the Eurozone economy went up 0.6% in Q2 2023, compared to the corresponding period in 2022, with Ireland and Romania reporting the most significant growth rates, according to preliminary data released on Wednesday by the European Statistics Office (Eurostat). Among the EU member countries for which data are available, the highest growth rates in April-June 2023 are reported in Ireland (2.8%), Romania (2.7%), Cyprus and Portugal (2.3%), while the most important negative rates were in Estonia (-3%), Sweden (-2.4%), Hungary (-2.3%) and Poland (-1.3%). Across the ocean, the US GDP went up 0.6% compared to the previous 3 months and 2.6% against the corresponding quarter last year.



    BACCALAUREATE Nearly 34,000 high school graduates in Romania, sitting the second session of this years Baccalaureate exam, Wednesday had the Romanian language and literature test, with papers graded digitally for the first time. The tests are scanned and uploaded on a platform, where they are assigned for grading to teachers in any part of the country except for the county where the student went to high school. The two tests in students major subjects are scheduled for August 17th and 18th. In order to pass the exam, candidates need an overall grade of at least 6 in their written tests. In the first Baccalaureate session, 75% of the candidates passed the exam.



    TRAFFIC Over 2.2 million Romanians and foreigners crossed Romanias borders during the Assumption of Mary holiday period, up 24% compared to the corresponding period of last year, the Romanian Border Police announced. The most crowded checkpoints were those on the Hungarian and Bulgarian borders, and those in airports. During the same period, border police issued fines totalling over EUR 60,000 and seized assets of over EUR 600,000. More than 100 Romanian nationals were denied exit and 90 foreign nationals were not allowed to enter the country for various reasons.



    UKRAINE The Romanian Defence Ministry strongly condemns the repeated strikes by Russian armed forces targeting critical infrastructure in Ukraine and regions inhabited by civilians in that country. The statement comes after on Wednesday morning the Danube River ports in Izmail and Reni, near the border with Romania, were hit by drone strikes. The war of aggression started by Russia against Ukraine is a blatant violation of international law, says the Defence Ministry, also adding that it has enhanced the monitoring of Romanias national territory and its maritime and airspace, jointly with NATO forces, to strengthen defence on the entire eastern flank and to deter possible aggressions against NATO member countries. (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)


  • Rising Trade, Falling Interest Rates

    Rising Trade, Falling Interest Rates

    In Romania, trading businesses registered a 9% increase in the first two months of this year as compared to the same period in 2022, show the latest data from the National Institute of Statistics. Thus, in February compared to January, trading of agricultural products had an increase of almost 27%, while trading of foodstuffs by only 4.6%. These indicators are important, in the opinion of economic analyst Constantin Rudniţchi, because they show the dynamics of the economy and consumption.



    Constantin Rudniţchi: “We can see that, despite these discussions and complaints about the Ukrainian cereals, this year, at least the agricultural products trading area is on first place in terms of growth, which points to the dynamism of this field. We also see lower figures in relation to food products, which is certainly the result of inflation. Also this lower growth figure shows us that consumption is also slowing down. We could expect this situation, because inflation almost forces consumers to reduce their consumption or buy cheaper products.



    In addition, analyst Constantin Rudniţchi says, in the next period there could be a slowdown in trading activities, given that inflation remains high and economic growth forecasts are decreasing compared to last year. According to the National Institute of Statistics, the annual inflation rate dropped to a little over 14.5% in March, from 15.5% in February, as foodstuffs prices rose by over 21%, and the prices of non-foods and services by 11%. However, the National Bank of Romania expects the annual inflation rate to decrease faster than previously anticipated, especially starting from the third quarter of this year, against the background of the extension of energy price capping and compensation schemes.



    On the other hand, Romanias central bank announces that the ROBOR indices continue their downward trend, and the rates should decrease slightly as of the middle of the year. The three-month ROBOR, according to which the basket of consumer loans in lei with variable interest is calculated, fell to the lowest value since July last year. In early 2023, the index was over 7.5%. According to the national bank data, the six-month ROBOR, used to calculate interest on mortgage loans in lei with a variable interest rate, also fell below 7% per year. (LS)

  • January 27, 2023

    January 27, 2023

    ECONOMY
    Romania reports a record-high GDP increase for last year, from EUR 240 bln in 2021 to nearly
    EUR 290 bln, according to the National Strategy and
    Forecast Commission. For this year, however, the institution estimates a
    slow-down of the economic growth from 4.9% in 2022 to 2.8%. The inflation rate
    is also expected to drop significantly by the end of this year, from 16.4% in
    2022 to 8%, and consumption growth is also predicted to drop to 2.4%, compared
    to 4.6% last year. The figures in the winter forecast, made public on Thursday,
    are not different from the ones in the autumn report, released in October.


    HEALTHCARE The number of respiratory infections in Romania dropped last
    week by almost one-quarter compared to the previous week, to 103,000 cases, the
    National Public Health Institute announced. The number is nonetheless 21%
    higher than the average weekly rate in 2015-2020. According to statistics,
    nearly 5,000 of them were flu cases. Since the start of the cold season, 36
    people died from the flu, and nearly 1.5 million people got anti-flu vaccines.


    DIPLOMACY The Romanian
    foreign minister Bogdan Aurescu had a bilateral meeting in Sibiu today with his
    Dutch counterpart, Wopke Bastiaan Hoekstra. The talks focused on Romania’s
    Schengen accession and the ongoing efforts to further this important goal. Bogdan Aurescu reiterated that Romania’s accession will help strengthen
    the security of the EU as a whole and will give credibility to the Union. In
    turn, ministrer Hoekstra reiterated the Netherlands’ active support for this
    process. Wopke Hoekstra also reconfirmed the Netherlands’ commitment to
    consolidating NATO’s deterrence and defence posture on the
    eastern flank, in the context of Russia’s aggression in Ukraine, by
    contributing troops to the NATO Battle Group in Romania. The 2 officials also
    discussed the Romanian-Dutch bilateral relations. The meeting took place in the
    context of the Dutch official’s visit to Romania for trilateral political
    consultations in Bucharest, together with the French diplomacy chief Catherine
    Colonna. Ahead of the talks, the 3 ministers made a joint visit to the French
    and Dutch troops stationed at the Cincu military base as part of the NATO Battle
    Group in Romania. In
    Bucharest, Catherine Colonna will be received by president Klaus Iohannis and
    PM Nicolae Ciucă.


    COMMEMORATION
    The International Holocaust Remembrance Day, or the International Day in Memory
    of the Victims of the Holocaust, is marked every year on January 27, under a
    resolution endorsed by the United Nations in 2005. In 1945, on January 27, Allied forces liberated
    the largest Nazi extermination camp, in Auschwitz-Birkenau, Poland. According
    to historians, the Holocaust resulted in the killing of 6 million Jewish people
    in Europe and millions of other ethnics by Germany’s Nazi regime. Events and activities are organised on
    this day every year at the UN headquarters in New York and UN offices around the world.
    This year’s theme is Home and Belonging. In 2022, the UN General Assembly
    adopted a resolution tabled by Israel, calling on all countries to condemn Holocaust
    denial and anti-Semitism, especially on social networks.


    TENNIS Gabriela Ruse (Romania) / Marta
    Kostiuk (Ukraine) today lost to the defending champions, Barbora Krejcikova and
    Katerina Siniakova (Czech Republic) 6-2, 6-2, in the doubles semi-finals of the
    Australian Open. This is the best performance for Ruse and Kostiuk in a Grand Slam
    event. Krejcikova and Siniakova hold a combined 6 Grand Slam doubles titles, 3
    of them last year alone, when they only missed the Roland Garros. In the final,
    the Czech players take on Shuko Aoyama/Ena Shibahara, of Japan, at their first
    presence in a Grand Slam final after defeating Coco Gauff/Jessica Pegula (US). (AMP)

  • Economic growth in Romania

    Economic growth in Romania

    Romania
    reports the highest economic growth rate in the European Union compared to the
    previous quarter, on the same level with Cyprus, while other member states have
    seen growth rates below 1% or even negative rates.


    The
    first estimates made public by the National Statistics Institute indicate that
    in the 3rd quarter of the year, the Gross Domestic Product went up 1.3%
    compared to the previous quarter and by 4.7% compared to Q3 2021. The data, the
    institution explains, was adjusted by seasonality and number of working days.


    For
    the first 9 months of the year, the economic growth was estimated at 4.3% compared
    to the corresponding period of last year.


    With
    the new data included in the quarterly reports, the Statistics Institute has
    revised downwards both the growth rate for the first quarter of this year, from
    6.4 to 4.4%, and the rate for the second quarter, from 5 to 3.9%, compared to
    the corresponding previous quarters.


    The
    economic analyst Constantin Rudniţchi believes that, while Romania’s economy
    has a strong seasonal factor to take into account, such substantial corrections
    are not desirable, because they may have a negative impact on companies’
    business plans.


    Constantin
    Rudniţchi: An investor interested in opening a business in Romania may take
    this decision based on this 6.4% economic growth rate, because obviously such a
    rate, quite exceptional under the current circumstances, makes a market
    attractive to investors. But if the growth rate is smaller, only 4%, of course
    they will think twice. So these figures may influence an investment decision.


    Economic
    growth figures also influence all the decisions concerning pensions and wages, and
    if statistics change so much, it means those decisions were mistaken, which is
    by no means a good thing for the economy, Constantin Rudniţchi also says.


    An
    incurable optimist, the PM Nicolae Ciucă promises Romania does not risk a
    recession:


    Nicolae
    Ciucă: We have taken measures to strengthen the economy, to keep it in balance
    so as not to go into recession. The data we have available at this point
    clearly indicates that by the end of the year Romania may well have a roughly
    5% economic growth rate, and for next year we expect an economic growth rate of
    around 1.5%.


    Nonetheless,
    forecasts coming from major international financial institutions are rather
    gloomy and point to a slowdown of the global economy. And a perfect storm, i.e.
    a mixture of elements such as the war in Ukraine, the rise in energy prices and
    the inflation pressure, may hit hard some national economies. (AMP)