Market Research Logo

Romania Country Report - April, 2016

EXECUTIVE SUMMARY 5
FOCUS STORY: Datio in Solutum bill – nearly promulgated 6
Romanian parliament endorses controversial debt discharge bill 6
Fitch says proposed mortgage law in Romania is negative for bank performance 7
RELATIONSHIP WITH IFIs 7
S&P affirms BBB- rating for Romania; risks tamed by low public, external debt 7
REAL SECTOR 8
1. Corporate, structural reforms 8
2. GDP, forecasts 9
IMF raises Romania’s GDP growth forecast to 4.2% in 2016 9
World Bank ups Romania’s 2016 growth projection to 4%, warns on risks of excessive deficit 9
Romania revises upward 2015 GDP growth to 3.8% 10
3. Industry, Constructions, Retail 11
Car production 4.1% down y/y in Q1 12
Romania’s economy uses 7.6% more electricity y/y in Jan-Feb 13
Use of oil and gas up by over 2% y/y in Jan-Feb 13
Services to firms 9.8% up y/y in Romania in February 14
Services rendered to Romanian households 20% up y/y in February 14
Construction works 8.7% up y/y in February 15
Retail sales growth accelerates to 21.8% y/y in February 16
4. Prices, Inflatio 17
CPI deflation deepens in March 17
February industrial prices 3.3% down y/y 17
5. Labour Market 18
Romania’s government withdraws bill on public sector wages 18
Net wages in Romania up real 15.8% y/y in February 19
ILO unemployment flat at 6.5% in February 20
FISCAL SECTOR 21
1. Budget Execution 21
Revenues to budget 6% above target in Q1, VAT collections 10%-15% down y/y 21
2. Public Debt 22
Public debt to GDP ratio down 1.32p to 37.8% at end-Jan 22
FINANCIAL SECTOR 23
President Iohannis returns law on macroprudential supervisory body to lawmakers 23
MONETARY POLICY 24
Central bank maintains monetary policy rate 24
BANK REGULATIONS 24
1. Bank Loan Quality 25
Overdue payments on forex loans in Romania up in February 25
BCR bank reportedly to sell €110mn NPL bundle to APS 25
Romanian banks could sell €3bn of NPLs this year, KPMG says 26
2. LOANS, DEPOSITS 27
Banks keep extending mortgage loans to households at fast pace in February 27
New consumer loans to households 66% up y/y in Jan-Feb 28
Bank deposits up 9.5% y/y at end-February 29
3. NON-BANK 30
City Insurance placed under financial recovery on insufficient capital 30
EXTERNAL SECTOR 31
1. Balance of Payments 31
Romania’s C/A deficit widens 8 times y/y to 0.2% of GDP in Jan-Feb 31
2. Foreign Trade 31
Exports return to high growth in February 31
Annual FOB trade gap 70% up y/y to 3.9% of GDP at end-February 32
2. External Debt 33
Gross external debt 4.3% down y/y at €89.6bn at end-February 33
3. Forex Reserves 34
Forex reserves at c-bank €457mn up in March 34

Romania Country Report - April, 2016

The report covers info as of April 20.
The datio in solutum bill is on the verge of being promulgated in a form harshly criticised by banks.

Key Points
S&P affirms BBB- rating for Romania; risks tamed by low public, external debt
Public debt to GDP ratio down 1.32p to 37.8% at end-Jan
Romania’s C/A deficit widens 8 times y/y to 0.2% of GDP in Jan-Feb
IMF raises Romania’s GDP growth forecast to 4.2% in 2016
World Bank ups Romania’s 2016 growth projection to 4%, warns on risks of excessive deficit
Romania revises upward 2015 GDP growth to 3.8%
Industry grows by only 0.8% y/y in February; output in past 12 months increased by 2.2% y/y, decelerating from 2.8% y/y calculated at the end of 2015
Retail sales growth accelerates to 21.8% y/y in February; services rendered to Romanian households 20% up y/y in February
Construction works 8.7% up y/y in February
CPI deflation deepens in March to minus 3% y/y
Net wages in Romania up real 15.8% y/y in February
ILO unemployment flat at 6.5% in February
Revenues to budget 6% above target in Q1, VAT collections 10%-15% down y/y
President Iohannis returns law on macroprudential supervisory body to lawmakers
Central bank maintains monetary policy rate at 1.75%; hikes expected for next year
Romanian banks could sell €3bn of NPLs this year, KPMG says
Banks keep extending mortgage loans to households at fast pace in February
New consumer loans to households 66% up y/y in Jan-Feb
Exports return to high growth in February: 9.5% up y/y
Annual FOB trade gap 70% up y/y to 3.9% of GDP at end-February


Download our eBook: How to Succeed Using Market Research

Learn how to effectively navigate the market research process to help guide your organization on the journey to success.

Download eBook

Share this report

;