The Business Week in Romania 28.11 - 02.12.2016

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MACRO AND PUBLIC POLICIES NEWS

·     Industrial shrinkage in October

In October, according to the data supplied by the Industrial Barometer, industrial activity slowed down yet again. The volume of production

index fell from 60 in September to 56 in October. The index is now a point below the average for the last twenty-four months. The sharp fall in the index means that in October the total volume of goods produced by industry shrank compared with the previous month. Nevertheless, industry continues to grow in relative terms, since the index is still six points above the level beneath which contraction sets in.

·     EUROSTAT: Youth unemployment in Romania higher than the European average

The rate of unemployment among Romanian young people is 21.7%, above the European average of 20.3%. The level is still alarmingly high, although it has been falling since 2013, when the rate was 23.7%. The lowest rate of unemployment among young people is in Germany, at 7,2%, which is in stark contrast to Greece, where the rate is 50%, and Spain, where the rateis 48,3%.

·     Mind-boggling increase in number of public contracts awarded without tender

The number of invitations to bid within the Electronic System of Public Acquisitions (S.E.A.P.) has dropped vertiginously in the last seven years, from around 47,700 in 2009 to around 13,700 in the last year. The fewest invitations were in 2014, when the number fell to just 11,200. Likewise, the number of announcements of public contracts awarded without a published invitation for tenders decreased from 9,900 in 2009 to 4,700 in 2015.

·     The Economist: Romanian economy will enjoy brisk growth in 2017

The Economist estimates that Romanian economic growth will reach 3.4% in 2017, the briskest in Europe, buoyed up by consumption in particular, but at the same time warns that the state has too many employees and the budget deficit will exceed the 3% of G.D.P. ceiling. The Economist predicts that by the end of 2017 Romania will have a budget deficit of 3.2% of G.D.P. and 2.2% rate of inflation.

·     Extent of Romanian remittances from abroad

Between three and four million Romanians work abroad, and in the last decade they have sent home more than fifty bn Euros in remittances, a figure higher than the total amount of foreign investments in the same period. Almost half the families in Romania have at least one member working abroad, according to the Romanian Institute for Evaluation and Strategy (I.R.E.S.). 51% of Romanians working abroad left their families behind and 49% took family members with them. 23% have left children behind.

·     Quarter of average family budget spent on household bills

According to Eurostat, in 2015, Romanians spent a quarter of their household budget on bills: water, electricity, gas, compared with 21% of their budget in 2005. Within the E.U., the highest percentage of household spending on bills is to be found in Denmark (29.4%) and Finland (28.2%), and the lowest percentage in Malta (10.1%), Lithuania (15.8%) and Cyprus (16.6%). The European average is 24.4%.

·     CFA: Macroeconomic confidence up twelve points in October

The C.F.A. Romania macroeconomic confidence index increased by twelve points to 65.3 in October. The current conditions index rose by 15.9 points to 82.9, an all-time high, and the forecasts index rose by 10.2 points to 56.6 points. Four per cent of employees live below poverty lineAccording to the Ministry of Labour, around 3.8% of the country’s total employees are “poor”, and in households with at least one person in work, “around seven per cent of the members of such households have incomes below the poverty line.”

·     State to borrow five million lei on hour in December

The Ministry of Finance intends to borrow 3.6 bn lei in December, of which half in six-month and one-year treasury certificates, and the other half in sovereign bonds maturing in an average of more than three years. The first issue of benchmark bonds took place on 5 December, worth three hundred m. lei and maturing in seven years. The second is scheduled for 8 December and will be worth five hundred million lei, maturing over four years. Another auction will be held on 12 December, worth three hundred million lei, maturing over five years, and another on 16 December, worth five hundred million and maturing over two years.

Sources: Capital, Mediafax, Curierul Național, Bursa

 

BUSINESS AND INVESTMENT NEWS

·     Tinmar enters household electricity market with discounts of up to 30%

Tinmar, Romania’s largest private energy supplier, is entering the household electricity market with discounts of up to thirty per cent on regulated prices, aimed at attracting Romanian clients. The package of services also includes bill exemption in the case of medical leave or unemployment, according to Tinmar’s director general, Augustin Oancea.

·     Sibiu, Prahova Valley, Vienna and Budapest top holiday destinations in 2016

Students and people under the age of twenty-five, as well as tourists over the age of fifty, with modest incomes, chose to spend the 1 December holiday taking coach trips to Sibiu, the Prahova Valley, Poiana Brașov and Bran-Moieciu, as well as to the Vienna, Budapest, and Prague Christmas markets, according to Christian Tour, the low-cost bus tour operator.

·     Colliers: 200,000 sqm of retail spaces finalized this year

Two hundred thousand sqm of retail spaces were delivered in Romania this year, the highest amount since 2009, according to Colliers International. The volume for 2017 is forecast to be one hundred and eight sqm, when a number of malls will be completed, including Shopping City Satu Mare (18,000 sqm) and Prima Shops Oradea (10,000 sqm), as well as the extensions to Shopping City Sibiu (16,900 sqm) and Shopping City Galați (27,000 sqm).

·     Kaufland now has 111 shops in Romania and has announced new jobs

German retailer Kaufland has announced the opening of its 111th shop in Romania, located in Rîmnicu Vîlcea, which will create ninety jobs. The hypermarket will have two thousand four hundred sqm and will incorporate a pharmacy, health food outlet, tobacconist and locksmith’s shop.

·     A.R.P.I.M: medicaments price calculation methodology has not been applied

The Romanian Association of International Medicaments Producers (A.R.P.I.M) claims that the risk of a price decrease remains even if the new methodology for calculating the price of medicaments has not been applied. A government decision is supposed to have reduced the price of medicaments no longer under patent to below the European minimumillion Thousands of medicaments in Romania are now below the sustainability level and have been taken off the market.

·     Poiana Brașov hotel recruiting from Philippines

In order to get around the labour shortage confronting Romanian tourism, the managers of the Teleferic Grand Hotel in Poiana Brașov have hit on a rather unusual solution: they are hiring from the Philippines, whose inhabitants are regarded as more reliable and hardworking than Romanians. However, due to the infamous sluggishness of Romanian bureaucracy, the hotel has to wait many months before the Filipinos receive work permits.

·     Jysk Romania turnover hypertrophic

In the 2015-16 financial year, retailer Jysk Romania achieved a turnover of 223 m.lei and an E.B.I.T. of twenty-eight million lei, results respectively 61% and 180% bigger than last year. Jysk retails products for the home and garden. In the last year, the Scandinavian company’s sales of mattresses in particular increased spectacularly. Jysk Nordic is present in forty-five countries and the group had a turnover of 3.12 bn Euros and an E.B.I.T. of 422 m. Euros in 2015-16.

·     Smart City guide launched

The Smart City for Romania guide has been launched in Alba Iulia by the Minister of Communications, Delia Popescu, who called it a tool for evaluating communications and a set of international good practices, solutions and intelligent technologies, which, applied at the local and regional level, could transform communities into intelligent cities. The Minister of Communications added that the concept of the smart city goes beyond bringing together citizens and suppliers of public services, and provides the necessary tools to encourage citizens to be more active in the life of their communities.

 

Sources: News.ro, Bursa, Capital, Profit.ro, WallStreet.ro.

 

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