The Business Week in Romania 16.10 - 20.10.2017

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MACRO

·      Current account deficit to over € 4 billion

According to the National Bank of Romania (BNR), the current account deficit amounted to 4,043bn  Euro in the first eight months of this year - up 52.39% compared to the same period of last year. According to BNR, ”the balance of goods recorded a deficit of 1.433bn Euro, the balance of services recorded a surplus of 146m Euro, the balance of primary incomes ended with a deficit of 113m Euro, and the balance of secondary incomes recorded a smaller surplus of 216m Euro".

·      The World Bank estimates a bigger growth for the Romanian economy

The World Bank estimates that, in 2017 and 2018, Romania's economy will register growth above current estimates – according to a report from the Bank, "GDP will probably grow by 5.5% this year, thanks to fiscal measures and improvement of the ovrall european economy. The increase in consumption would extend the current account deficit to 3.1% in 2017, from 2.4% in 2016. Inflation would rise, reflecting excessive domestic demand and mitigating the effects of tax cuts. The National Bank of Romania expects a gradual increase of inflation to 2% at the end of 2017 ". The report warns of additional fiscal measures required to address the growing vulnerability of the local economy: "authorities should consider additional fiscal measures if the budget deficit risks to exceed 3% of GDP in 2017 and 2018".

·      Foreign direct investment is declining

Between January and August 2017, foreign direct investment declined by 18.56% compared to the same period in 2016, reaching a total of 2.518bn Euro. According to data published by BNR, "direct investment of non-residents in Romania amounted to 2.518bn Euro (compared to 3.092bn Euro between January and August 2016), of which 2.804bn Euro represented equity capital, and 286m Euro represented the negative net value of intragroup loans.

·      Companies with foreign investors record a turnover of 148bn euros

In 2016, companies controlled by foreign investors recorded a total business turnover of 148bn Euro (3.1% more than in 2015). The average number of employees also increased with almost 3% - companies with foreign investors employ approximately 1,264m employees. 

·      Romania, one of the EU countries with the least rapidly-growing companies

According to a Eurostat report, only 2.3% of Romanian companies have a rapid growth rate (defined as an average increase in the number of employees by more than 10% over a period of three years). Thus, Romania is on the second last place in the European Union, being surpassed only by Cyprus (with a 2.2 percent).

·      Almost a quarter of Romania's exports come from the automotive industry

Romania's car industry provides about 25% of exports, according to Florin Vodiță, State Councilor of the Prime Minister. This sector should therefore be encouraged: "the government has taken a series of measures to stimulate innovation, research and development activities by exempting from the payment of corporate income tax in the first ten years of activity of companies exclusively carrying out activities in this sector with very high added value", according to the councilor. Romanian car production currently generates 360,000 new units per year.

·      Over 450,000 buildings sold in Romania in the first 9 months of 2017

According to data published by the National Agency for Cadastre and Real Estate Advertising, 451,072 real estate properties were sold in Romania between January and September – in September alone, over 57,000 properties were sold. Most sales were recorded in Bucharest (57,116), Cluj (30,533) and Ilfov (26,582).

 

Sources: Agerpres, Profit.ro, Capital

 

BUSINESS

·      GreenFiber, a 7.5m Euro loan from the European Investment Bank

Romanian company GreenFiber International SA will receive a loan of 7.5m Euro, through the Juncker plan. The amount will be used to fund a recycling project that will process over 50,000 tons of waste per year and will generate 280 new jobs.

·      Dacia sales advance in the first 9 months of the year

Dacia sales rose in the first three quarters of the year to more than 350,000 units sold at European level. The company records a monthly average of approximately 36,000 registrations. Dacia now ranks 13th in Europe, and its market share has consequently increased to 3%.

·      Hidroelectrica estimates revenues of more than 3.3bn Lei in 2018

Hidroelectrica, the state-owned company, estimates a revenue of 3.31bn Lei for next year, and a net profit of 1.13bn Lei. The company plans to invest 862.3m Lei next year.

·      Astaldi and IHI Infrastructure Systems to build bridge across the Danube

The Astaldi and IHI Infrastructure Systems association has won the project for the construction of a suspended bridge over Danube, from Brăila. The project is worth 1.99bn Lei, and the duration of the contract is 48 months – of which 12 months are dedicated to design and 36 months for execution of construction works. The new bridge will have a central opening of over 1.1 km and will be the most extensive infrastructure work done over the last 27 years.  

·      Catinvest to expand Electroputere Park in Craiova

The Catinvest Group plans to expand the shopping center Electroputere Parc, located in Craiova, by 9,200 square meters. Catinvest is about to build an independent building to serve both commercial spaces, as well as offices and parking spaces. The investment is valued at over 70m Euro by the end of 2018.

 

Sources: Profit.ro, Capital, Ziarul Financiar, Agerpres

 

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