Tag: IMF forecast

  • From the budget deficit to the European minimum wage

    From the budget deficit to the European minimum wage

    The International Monetary Fund downgraded its forecast regarding the growth of the Romanian economy this year, from 2.8% in April, to 1.9% in its latest report. The average annual inflation rate is expected to reach 5.3% at the end of 2024 and 3.6% in 2025, whereas unemployment should remain at 5.6% and go down to 5.4% next year. The current account deficit is estimated at 7.5% of GDP this year and at 7% next year. The European Statistical Office (Eurostat) in turn published data showing that the government deficit in the European Union has increased from 3.2% of GDP in 2022 to 3.5% in 2023, the highest levels being recorded, last year, in Italy (minus 7.2%), Hungary (minus 6.7%) and Romania (minus 6.5%). In the case of Romania, Eurostat data shows that the government deficit increased from around 88 billion Lei in 2022 to almost 105 billion Lei last year (1 euro = approx. 5 lei, e.n.). Meanwhile, government spending decreased from 40.4% of the GDP in 2022 to 40.3% last year, while revenues went down from 34% to 33.7%.

     

    Previously, Standard & Poor’s reconfirmed the good rating of the government debt and the stable outlook of Romania. The agency warned, however, that Romania’s rating could be downgraded if the deficit continues to exceed forecasts and if other imbalances persist, such as high inflation or the current account deficit, i.e. the difference between high imports and low exports. Standard & Poor’s also predicts that the current pre-election spending, marked by increases in pensions and salaries in the public sector, will push Romania’s deficit to 7.3% this year. Since macroeconomic statistics usually fall on deaf ears in society, as many Romanians remain poor, with rampant inflation dramatically eroding their purchasing power in recent years, politicians decided to offer them some consolation. A little more than a month before the presidential and parliamentary elections, the Bucharest Chamber of Deputies adopted, as a decision-making body, the draft law on increasing the minimum wage. The law transposes a European directive that aims to improve the working and living conditions of employees. The document stipulates that the minimum gross basic salary guaranteed should be established annually through periodic updating, after consulting trade unions and employers’ associations at national level and taking into account the costs of living and other economic and social indicators. The value of the minimum gross salary is expected to stand between 47 and 52% of the average national salary. (VP)

  • April 9, 2019 UPDATE

    April 9, 2019 UPDATE

    EUROPEAN COUNCIL – Romania’s President Klaus Iohannis on Wednesday
    will attend the European Council meeting in Brussels devoted to Brexit.
    According to the presidency, heads of state and government will discuss in the
    EU27 format the latest developments in the Brexit file, as well as Theresa
    May’s latest request for a new deadline. European Council President Donald Tusk
    said the EU might extend the deadline for Brexit, provided the British
    Parliament ratifies the agreement with the EU.






    CAMPAIGN – The Government supports Romanians worldwide to help them
    understand their rights and obligations, Prime Minister Viorica Dancila said
    Tuesday at the launch of the third edition of the national campaign
    Information at home! Safety everywhere!. The campaign addresses Romanians who
    study, work and live abroad. The program is run in every city and will help
    present the most important elements of legislation of countries of destination,
    regarding work conditions and consular assistance services, the Prime Minister
    said. According to Viorica Dancila, the campaign also comprises information
    programmes the Government is currently running, such as Diaspora start-up,
    Start-up Nation, Homecoming bonuses. Launched in 2017 in three counties and
    extended last year at national level, the campaign has proved very efficient, Prime
    Minister Dancila added. Official data points to a drop in the number of victims
    of human trafficking, as a result of the effort to inform citizens over the
    risks they expose themselves to when working as seasonal or illegal workers
    abroad.






    ACCUSATIONS – Romania’s Prosecutor General Augustin Lazar on
    Tuesday dismissed public accusations claiming he denied parole to several
    anti-communists dissidents during his time as a member on the Parole Committee
    of the prison in Aiud. Lazar said he did not handle cases investigating crimes
    against the communist regime. He added he is not an officer, agent or informer
    of intelligence services. The attacks were launched to coincide with my
    candidacy for a new mandate of prosecutor general, Augustin Lazar went on to
    say.






    CITIZEN INITIATIVE – Romania’s Constitutional Court on Tuesday
    ruled that the citizen initiative to revise the Constitution, under which
    people who receive final sentences should no longer be allowed to occupy public
    positions, is in line with the fundamental law. The initiative was signed by approximately
    1 million people and will be submitted to Parliament for debate and vote. To
    modify the Constitution, a referendum must be staged and meet the required
    quorum, whereas the citizen initiative must pass in Parliament.






    DIGITIZATION – Romania supports development and innovation in the
    field of agriculture and culture, and women’s participation in digital economy,
    Romanian Minister of Communications, Alexandru Petrescu said on Tuesday at the
    third edition of the Digital Day. The event is organized in Brussels by the
    European Commission. Minister Petrescu has said that the signing, on Tuesday,
    of joint declarations on the digitization of agriculture and of the cultural
    heritage and also opportunities for women to make a career in the digital
    sector are important topics on the agenda of the Romanian Presidency of the
    Council of the EU.






    DRILL – Sea Shield 2019, a military drill involving the
    participation of more than two thousand servicemen from six countries, is
    underway in Constanta, Romania’s main Black Sea port. Participants will be
    training in order to be able to respond to various types of attacks, coming
    from submarines, battleships or warplanes in the Black Sea. According to
    Vice-admiral Alexandru Mîrşu, the Romanian Navy Chief of Staff, the structure
    coordinating the exercise, the drill’s scenario is a fictional one being by no
    means provocative. NATO has beefed up its presence in the Black Sea from 80 to
    120 days per year and the NATO Mine Countermeasures Group made up of ships from
    the Netherlands, Canada, Turkey, Bulgaria and Romania is proof of the
    Alliance’s commitment to protecting the eastern flank, preventing conflicts and
    keeping peace in the region.






    EXERCISE – Vigorous Warrior 19, the most complex multinational
    medical exercise in the history of NATO, continues until Friday in three
    locations in Romania, namely, Bucharest, Cincu and Constanta. The purpose of
    the exercise is joint training to provide multinational medical support in NATO
    operations, thus practicing the necessary procedures to provide continuous
    medical care, strategic medical evacuation, increasing the level of training
    and response to a possible chemical, biological or improvised device incidents.
    The exercise, organized by Romanian Defense Ministry in collaboration with the
    Medical Department of the National Defense Ministry and the NATO Center of
    Excellence for Military Medicine, is attended by representatives from 38
    countries, most of them NATO members.






    IMF – The IMF has downgraded its economic growth forecast for
    Romania this year to 3.1% and to 3% for 2020, also estimating an increase in
    the inflation rate and the current account deficit. As regards consumer prices, the IMF estimate
    has gone up for 2019, to an annual inflation rate of 3.3% as compared to the
    previous 2.7% estimate. The inflation rate is expected to stand at 3% in 2020. The
    IMF also downgraded its estimate regarding Romania’s current account deficit to
    5.2% as compared to the original estimate of 3.4%. The IMF has also downgraded
    its global economic forecast to 3.3% this year.






    MEDALS – Romanian athletes Loredana Toma and Irina Lepsa on Tuesday
    won six medals, three gold, two silver and one bronze in the 64-kg category at
    the European Weightlifting Championships in Batumi, Gerogia. Romania has so far
    grabbed 12 medals in this year’s edition, of which six gold, two silver and
    four bronze. 14 Romanian athletes are taking part in the championships, which
    counts as a preliminary qualifying stage for the Tokyo Olympics next year.

    (translated by V. Palcu)

  • April 9, 2019 UPDATE

    April 9, 2019 UPDATE

    EUROPEAN COUNCIL – Romania’s President Klaus Iohannis on Wednesday
    will attend the European Council meeting in Brussels devoted to Brexit.
    According to the presidency, heads of state and government will discuss in the
    EU27 format the latest developments in the Brexit file, as well as Theresa
    May’s latest request for a new deadline. European Council President Donald Tusk
    said the EU might extend the deadline for Brexit, provided the British
    Parliament ratifies the agreement with the EU.






    CAMPAIGN – The Government supports Romanians worldwide to help them
    understand their rights and obligations, Prime Minister Viorica Dancila said
    Tuesday at the launch of the third edition of the national campaign
    Information at home! Safety everywhere!. The campaign addresses Romanians who
    study, work and live abroad. The program is run in every city and will help
    present the most important elements of legislation of countries of destination,
    regarding work conditions and consular assistance services, the Prime Minister
    said. According to Viorica Dancila, the campaign also comprises information
    programmes the Government is currently running, such as Diaspora start-up,
    Start-up Nation, Homecoming bonuses. Launched in 2017 in three counties and
    extended last year at national level, the campaign has proved very efficient, Prime
    Minister Dancila added. Official data points to a drop in the number of victims
    of human trafficking, as a result of the effort to inform citizens over the
    risks they expose themselves to when working as seasonal or illegal workers
    abroad.






    ACCUSATIONS – Romania’s Prosecutor General Augustin Lazar on
    Tuesday dismissed public accusations claiming he denied parole to several
    anti-communists dissidents during his time as a member on the Parole Committee
    of the prison in Aiud. Lazar said he did not handle cases investigating crimes
    against the communist regime. He added he is not an officer, agent or informer
    of intelligence services. The attacks were launched to coincide with my
    candidacy for a new mandate of prosecutor general, Augustin Lazar went on to
    say.






    CITIZEN INITIATIVE – Romania’s Constitutional Court on Tuesday
    ruled that the citizen initiative to revise the Constitution, under which
    people who receive final sentences should no longer be allowed to occupy public
    positions, is in line with the fundamental law. The initiative was signed by approximately
    1 million people and will be submitted to Parliament for debate and vote. To
    modify the Constitution, a referendum must be staged and meet the required
    quorum, whereas the citizen initiative must pass in Parliament.






    DIGITIZATION – Romania supports development and innovation in the
    field of agriculture and culture, and women’s participation in digital economy,
    Romanian Minister of Communications, Alexandru Petrescu said on Tuesday at the
    third edition of the Digital Day. The event is organized in Brussels by the
    European Commission. Minister Petrescu has said that the signing, on Tuesday,
    of joint declarations on the digitization of agriculture and of the cultural
    heritage and also opportunities for women to make a career in the digital
    sector are important topics on the agenda of the Romanian Presidency of the
    Council of the EU.






    DRILL – Sea Shield 2019, a military drill involving the
    participation of more than two thousand servicemen from six countries, is
    underway in Constanta, Romania’s main Black Sea port. Participants will be
    training in order to be able to respond to various types of attacks, coming
    from submarines, battleships or warplanes in the Black Sea. According to
    Vice-admiral Alexandru Mîrşu, the Romanian Navy Chief of Staff, the structure
    coordinating the exercise, the drill’s scenario is a fictional one being by no
    means provocative. NATO has beefed up its presence in the Black Sea from 80 to
    120 days per year and the NATO Mine Countermeasures Group made up of ships from
    the Netherlands, Canada, Turkey, Bulgaria and Romania is proof of the
    Alliance’s commitment to protecting the eastern flank, preventing conflicts and
    keeping peace in the region.






    EXERCISE – Vigorous Warrior 19, the most complex multinational
    medical exercise in the history of NATO, continues until Friday in three
    locations in Romania, namely, Bucharest, Cincu and Constanta. The purpose of
    the exercise is joint training to provide multinational medical support in NATO
    operations, thus practicing the necessary procedures to provide continuous
    medical care, strategic medical evacuation, increasing the level of training
    and response to a possible chemical, biological or improvised device incidents.
    The exercise, organized by Romanian Defense Ministry in collaboration with the
    Medical Department of the National Defense Ministry and the NATO Center of
    Excellence for Military Medicine, is attended by representatives from 38
    countries, most of them NATO members.






    IMF – The IMF has downgraded its economic growth forecast for
    Romania this year to 3.1% and to 3% for 2020, also estimating an increase in
    the inflation rate and the current account deficit. As regards consumer prices, the IMF estimate
    has gone up for 2019, to an annual inflation rate of 3.3% as compared to the
    previous 2.7% estimate. The inflation rate is expected to stand at 3% in 2020. The
    IMF also downgraded its estimate regarding Romania’s current account deficit to
    5.2% as compared to the original estimate of 3.4%. The IMF has also downgraded
    its global economic forecast to 3.3% this year.






    MEDALS – Romanian athletes Loredana Toma and Irina Lepsa on Tuesday
    won six medals, three gold, two silver and one bronze in the 64-kg category at
    the European Weightlifting Championships in Batumi, Gerogia. Romania has so far
    grabbed 12 medals in this year’s edition, of which six gold, two silver and
    four bronze. 14 Romanian athletes are taking part in the championships, which
    counts as a preliminary qualifying stage for the Tokyo Olympics next year.

    (translated by V. Palcu)