· Romania: negative inflation into September
The E.U. and Euro Zone annual rate of inflation increased to 0.4% in September, from 0.3 and 0.2% in the two preceding months respectively. In September the countries with the lowest annual rates of inflation were Belgium (1.8%), Estonia (1.7%) and Austria (1.1%), while Bulgaria (-1.1%), Poland (0.2%) and Romania were in negative figures. Compared with August 2016, inflation fell in nine member states, rose in sixteen, and remained steady in two.
· Six straight years of service surpluses, but trade deficit gets worse
In August the balance of payments deficit was 2.15 billion Euros, compared with 2.11 billion in July, equivalent to 1.2% of estimated G.D.P. The trade deficit for the first eight months was 2.9 billion Euros, while the international services surplus was 2.3 billion Euros. Last year, the trade deficit was 7.7 billion Euros, and the international services surplus was 6.9 billion Euros. This is the sixth consecutive year in which services have shown a surplus: 2.3 billion Euros for the first eight months of 2016.
· Environment stamp to be replaced with fuel tax
Environment Minister Cristiana Pașca Palmer proposes to replace the environment tax, which the European Commission has declared illegal, with a form of taxation included in the price of fuel, with taxation depending on fuel consumption. The minister acknowledges that the current motor vehicle registration tax is not legal, but she does not agree that it should be eliminated altogether without a new form of taxation taking its place.
· E.I.B. money for Romanian S.M.S.B.’s.
The European Investment Bank and the Government of Romania have signed an agreement to allocate one hundred million Euros of European Regional Development Funds to small- and medium-sized businesses, but could mobilise 580 million Euros in the coming years. The additional resources would come from the E.I.B. and the E.U.’s Horizon 2020 research programme. European Commission Vice-President Jyrki Katainen believes that Romanian small- and medium-sized business require impetus in order to develop beyond local markets.
· State entices Romanians abroad with tens of thousands of Euros
The Romanian State is to provide Romanians abroad with forty thousand Euros each if they return to Romania to start a new business through the Diaspora Start-up programme. The Ministry of European Funds and the Relations with Romanians Abroad Department of the Ministry of Foreign Affairs have allocated thirty million Euros to Diaspora Start-up from the Human Capital Operational Programme 2014-2020.
· GfK: Romania’s economic situation better than consumers think
The national economy is on the up, with significant growth in the second quarter, even though the general populace has little faith in the direction the economy is heading and fears a recession. A GfK press release states that although Romania’s economy is burgeoning, consumers are still sceptical and a recession cannot be ruled out. Economic expectations have fallen three points since June and in September stood at 1.2. The indicator was 18.5 points higher a year ago.
· Romania’s G.D.P.: 300% increase over the last eighteen years
Per capita G.D.P. has increased fourfold since 1998. Romania is eighth in the world and second in Europe when it comes to economic growth over the last two decades. Many Romanians think that the country is incompatible with a decent standard of living, but tend to forget that it is one of the highest-performing economies in the world, at least according to World Bank figures, which show that G.D.P. increased by 303% from 1998 to 2015.
Sources: Capital, Agerpres, Ziarul Financiar, Curierul Național, MediaFax, News.ro
· TAROM opens round-the-clock Maintenance Control Centre
TAROM has set up a Maintenance Control Centre to monitor defects and provide round-the-clock assistance, and a non-stop Aircraft on the Ground office to provide spare parts, as a means of dealing with cancelled and delayed flights. Minister of Transport Sorin Bușe recently made a working visit to inspect TAROM’s Technical Department.
· Vel Pitar: 5 to 6% of “fresh” bread is in fact defrosted imports
Romania’s bakery sector is worth 1.5 billion Euros, five to six per cent of which is accounted for by imported frozen bread that it is full of additives, but which is sold in the shops as fresh bread, declared Dan Trifu, vice-chairman of Vel Pitar, at an agricultural conference, criticising the fact that such products are not clearly labelled. Trifu also declared that the law on clear labelling is being flouted, but the authorities take no measures.
· Murfatlar shareholder George Ivănescu under investigation for sleaze
Businessman George Ivănescu, a shareholder in Murfatlar, is under investigation by the National Anti-corruption Department in a tax evasion case involving sums of around six hundred million lei. Ivănescu was arrested following searches carried out at companies in the wine industry. The alleged tax evasion and corruption is said to have occurred between 2010 and 2014.
· K.F.C. opens new restaurant in Bucharest
K.F.C. has opened a new outlet in Auchan Titan, Bucharest, bringing the chain’s number of outlets nationwide to sixty-one. Three hundred and fifty thousand Euros were invested in the new restaurant and thirty jobs were created. K.F.C. granted its Romanian franchise to U.S. company Food Network in 1997. K.F.C. Romania also runs two restaurants in Kishinev.
· Diverta expands nationwide
Book, toy and stationary retailer Diverta has expanded its network with three new shops in Tîrgu Mureș (Promenada Mall, 15 October), Turnu Severin (Severin Shopping Centre, 22 October) and Bucharest (Veranda Mall, 27 October). Amalai Buliga, Diverta’s C.E.O., declared that the retailer’s sales look set to reach 1.5 million Euros this year, after the opening of five new shops, including the aforementioned three.
· Young people not business-minded
Just ten per cent of the 1.22 million shareholders in local companies are aged under thirty: 121,000 entrepreneurs, a decrease of eight per cent compared with August 2013. Marin Preda, who teaches Sociology at Bucharest University, says: “Romania is a country centred on the elderly, and nobody is bothered about young people. We have a huge unemployment rate; there are no projects for young people. Likewise, we have the highest rate of poverty among young people. Support for the young needs to be a priority in the majority of sectors. There have to be real rather than theoretical programmes. It would also be useful to invest in children and young people.”
· Eight out of ten business insolvencies are Romanian companies
The top one hundred insolvent companies in the period 2011-15 are dominated by Romanian companies. Seventy-seven of the one hundred have Romanian shareholders. Top of the list is state-owned Hydroelectrica, followed by the Romet industrial group and state-owned chemicals company Oltchim, which were businesses worth hundreds of millions of Euros in their heyday. Analysts Coface put the situation down to the fact that Romanian entrepreneurs lack discipline when it comes to payments and are focussed on short-term gain rather than long-term business development.
· La Fântâna enters bottled water market
Water and coffee supplier La Fântâna has entered the bottled water market, launching a half-litre still or sparkling product, which will be delivered to corporate clients and will also be available to individual customers. The water is bottled from a source in Mitrovo Polje, Serbia. In 2015, La Fîntîna, which serves more than fifty thousand clients, reported a turnover of more than 42 million Euros and a gross profit of 5.03 million Euros.
· Immofinanz to rebrand its Romanian malls
Austrian real estate developer Immofinanz is to rebrand its four Romanian malls, in Cluj, Constanța, Piteși and Baia Mare, in the first phase investing 710,000 Euros on changing their visual identity, and a further 1.1 million Euros on refurbishing the restaurant area of the Cluj mall. The process will begin in November and is scheduled to be completed in 2017. Polus Centre Cluj, Maritimo Shopping Centre Constanța, Pitești Mall, and Gold Plaza Baia Mare will all come under the same Vivo brand as the developer’s six malls in Poland, Czech Republic and Slovakia.
Sources: Ziarul Financiar, Agerpres, Profit.ro, Curierul Național, News.ro