The Business Week in Romania 09.01 - 13.01.2017

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MACRO

·       Romanian exports hit record levels in November 2016

Exports of Romanian goods saw an upsurge in November 2016, registering an increase of 11.7% compared with the same month in 2015 and attaining a record level of 5.3 billion Euros, while imports rose by 11.6%, reaching the figure of 6.17 billion Euros, according to preliminary data published by the National Institute of Statistics. November 2016 was the third consecutive month in which exports exceeded five billion Euros, with figures of 5.24 billion Euros and 5.09 billion Euros being recorded in September and October respectively. In November 2016 the trade deficit was 865.5 billion Euros, an increase of 10.9% (85.4 million Euros) compared with November 2015.

·       Unpleasant revenues surprise

In December 2016, revenues were just sixteen billion lei compared with twenty-four billion in December 2015, throwing the annual budget into complete disarray. The initial budget estimates point to a thirty-three per cent decrease in December, which results in revenues of just 221.5 billion lei for 2016, 14.2 billion less than the rectified

estimate of revenues made in November 2016, according to sources close to the Ministry of Finance. The rectified budget was based on revenues of 235.7 billion lei.

·       Romania’s standard of living lags behind the rest of Europe

Romania’s standard of living has improved significantly in the last two decades, but in absolute terms many economic indices place the country at the bottom of the European league, with the gap between Romania and Germany having widened. “In 2015, per capita G.D.P. in Romania was eleven times greater than in 1950. From this standpoint, the data is very clear, and I know not who might say that it was better in the communist period”, said Șerban Toader, a senior partner with K.P.M.G. Romania at an event to launch a report on Romania’s standard of living between 1990 and 2014.

·       Record rate of wage growth

The average national net wage, which includes earnings, bonuses and vouchers, increased by three per cent (sixty-four lei) in November 2016 compared with the previous month and now stands at 2,172 lei (482 Euros). The annual rate of growth has increased to 13.2%, according to data published by the National Institute of Statistics. In October 2016 the annual rate fell to 12.7%, from 14.2% in September and 14.5% in August, having reached a peak in March 2009.

·       TransElectrica announces imminent energy crisis

The Government has passed a decision allowing the TransElectrica state monopoly to take extreme measures, such as interrupting energy exports, in the case of an emergency. “The decision is a temporary preventive measure that can be brought into effect only in the situation in which an emergency arises on the energy market in the period to come (16 January-15 February) and only if public safety or the electrical energy system is threatened”, said the Ministry of Energy in a communiqué.

·       Record direct foreign investment

Foreign companies made direct investments in Romania worth 3.928 billion Euros in the first eleven months of 2016, an increase of twenty-two per cent compared

with last year and the highest figure for the last eight years, according to the National Bank of Romania.

Sources: News.ro, Adevărul, Ziarul Financiar, Profit.ro, Agerpres

 

BUSINESS

·       Romcarton to built factory in Popești-Leordeni

Romcarton Bucharest, one of the largest producers of corrugated cardboard packaging in Romania, part of the French Rossmann group, is to invest 27.5 million Euros in a new cardboard factory in Popești-Leordeni, Ilfov, thanks to a loan from the Romanian Commercial Bank. The company also has a factory on Theodor Pallady Boulevard.

·       RomExpo takes out loan to finish extension work begun in 2008

RomExpo S.A. is to take out a fifty-five million lei (12,200,000 Euros) investment loan from Libra Bank to finalise construction of two new exhibition pavilions. Work began in 2008 but was delayed by the financial crisis. The loan will be secured on mortgaged buildings, bank accounts and future income from rent income.

·       Romanians splurge three billion Euros on shopping in December

In December, Romanians spent around 3 to 3.6 billion Euros in the shops, most of it on food, and the remainder on clothes, cosmetics, electronics, toys and furniture.

Retailers report an increase in sales in December 2016 compared with the same month in 2015, with tax decreases and wage increases leading Romanians to open

their wallets more readily during the festive season. The month of December accounts for around twenty-five to thirty per cent of annual toy and electronics sales and thirteen to seventeen per cent of clothes sales.

·       State aid for washing machine factory in Dâmbovița

Household electrical goods producer Arctic of Găești has received state aid to the value of 162,500,000 lei in order to build a second factory in Romania, which will produce washing mashines. The total value of the project is 471,000,000 lei, of which thirty-five per cent is state aid. It is one of the four investment projects that were cleared for state aid in 2016, the others being investments by car parts manufacturer Robert Bosch, Alu Menziken, and Pirelli Tyres Romania. Applications by Clariant Products and Safe Med International were turned down. The Arctic factory will create four hundred and eighty jobs.

·       Top employers in 2016

Last year, Kaufland, OMV Petrom and Automobile Dacia were Romania’s biggest employers. Retailer Kaufland reported more than seventeen thousand seven hundred employees at the end of the year and was the country’s biggest employer, according to Ministry of Labour employee data.

·       Leoni has three hundred job vacancies

The Leoni car industry cables factories in Pitești, Arad, Bistrița and Beiuș (Bihor), owned by the German Leoni group, are looking for three hundred and eleven unqualified labourers, electrical mechanics, engineers, technicians, goods handlers and stock controllers. The largest number of vacancies is in Arad, where Leoni has one hundred and thirty-three job openings, one hundred of which are for unqualified parts assembly workers. The cables factory in Pitești has one hundred jobs up for grabs.

·       First electric car charging point opens in Bucharest

Electrica, Romania’s market leader in the distribution and supply of electrical energy, and OMV Petrom, South Eastern Europe’s biggest producer of oil and gas, have unveiled their first rapid electric car charging station in an OMV petrol station. The station is part of a pilot programme, with rapid charging points to open in four OMV petrol stations around Bucharest and at OMV Petrom City and Electrica headquarters. The rapid charging points have a maximum capacity of 50kWh.

·       Top companies among those burned by Mareea insolvency

More than two hundred and fifty companies, including banks, hotels and tourist agencies, as well as state institutions and private individuals have been included on the preliminary list of those trying to recoup more than seven million Euros in receivables from the Mareea agency, which went into insolvency at the beginning of September 2016. Raiffeisen Bank is owed 1.46 million Euros, Christian Tour, Romania’s largest tourist agency, is owed 650,000 Euros, Nicolae Bucovală’s hotel company Parthis 283,000 Euros, and THR Black Sea 310,000 Euros. Market sources say that the list would have been longer, but some companies have abandoned all hope of recouping money from a company of which “only a few computers and a compromised name remain”.

·       Romania in the throes of a qualified labour deficit

Only two countries in the world, Japan and Taiwan, have greater difficulties than Romania when it comes to a deficit of qualified labour, with seventy-two per cent of

local firms being faced with such problems. The greatest obstacle is identifying qualified workers, engineers, and production operatives, according to a study carried out by Manpower. Companies in Romania are faced with increasing difficulties in finding qualified labour, against a backdrop of 521,202 people unemployed in 2016, an all-time low since the crisis of 2008. Unemployment has fallen to 5.7% according to recent National Institute of Statistics data.

Sources: Bursa, Profit.ro, Economica.net, Ziarul Financiar, Mediafax, Bitpress

 

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