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According to the Romanian National Institute of Statistics :

  • In August 2018, the average gross nominal earnings* were 4449 lei (about 953 euro), by 1.4% lower than the one
    registered in July 2018.
  • The average net nominal earnings were 2669 lei (about 572 euro), decreasing as against the previous month with 39 lei
    (-1.4%).
  • The highest values of the average net nominal earnings were recorded in computer programming, consultancy and related activities (6319 lei, about 1354 euro), while the lowest in accommodation and food service activities (1556 lei, about 333 euro).

August 2018 as compared to August 2017

  • As compared to August of the previous year, the average net nominal earnings increased by 12.9%.

Earnings in relation with the evolution of consumer prices

  • The real earnings index** in relation with the same period of previous year was 107.5%.
  • The real earnings index was 98.3% for August 2018 as against previous month.
  • As compared to October 1990, the real earnings index was 191.6%, by 3.4 percentage points lower than the one recorded in July 2018.

*) The average gross monthly earnings are determined by reporting the amounts from the salary fund, net profit and other funds (exclusive severance payments, backdated paid arrears as consequence of wining the lawsuits involving the money rights related to previous years, nominal value of  holiday vouchers) to the average number of employees.
**) calculated as the ratio between the net nominal earnings index and the consumer prices index.

The Administration Ports of the Maritime Danube (APDM) of Galati signed the contract for the "Elaboration of the technical project for the execution of investment works", part of the first phase of the intermodal terminal project which highlights the strategic position and technical facilities of the three ports of Galati with the creation of an intermodal fluvial maritime-railway terminal that will become a hub for the transport of goods between Asia and Western Europe, through the channel of Rhin-Main-Danube.
The value of the first phase, which will end on March 31, 2020 is 25.619.781 euros, of which, non-refundable funding from the European Commission through the mechanism to connect Europe of 21.776.814 euros, co-financing by the State of 3.450.053 euros and contributions from the private investors Metaltrade International Ltd. and New Port Basin of 392,914 euros.

At the end of the investment in the Galati intermodal terminal, the multimodal platform it could be transited by 300,000 containers, equivalent to 5-6 million tons of goods per year, and would create over 50,000 new jobs in 10 years.

This project will take place in two phases, due to budget constraints of the European Commission. From the EUR 80 million, estimated value of this project, the Commission was able to allocate only 25 million, which represents a part of the port infrastructure, pier and part of the eligible costs, including design.

The economic growth that Romania posted last year is definitely impressive. The National Statistics Institute (INS) announced on Wednesday that the country’s economy went up by 7% in 2017 as against the previous year. This is the most significant advance since 2008, a period also marked by sustained economic growth and followed by recession and austerity. According to the INS, in the last quarter of 2017 Romania had the biggest growth of all the 28 EU member states. An Eurostat report confirms this situation.
The main engine for growth has been household consumption, stimulated by smaller taxes and an increase in salaries, followed by the industry, but with little public investment for the second consecutive year.

Also on Wednesday, the Central Banks’ Board announced that the expected dynamics of economic growth remains robust in 2018, but it goes down in 2019. The National Commission for Prognosis has recently revised upwards, to 6.1%, the GDP advance estimated for this year, after an initial 5.5% forecast for 2018. Also, the World Bank has recently announced Romania is expected to report a 6.4% increase in its GDP for 2017 as compared to the 4.4% forecast in June.

The Romanian government today approved payments for agricultural subsidies for the year 2017, amounting to about 1.8 billion euros, representing direct payments in the vegetal sector, national aid to the livestock sector and coupled support scheme for sheep / goat species.

Direct payments in the vegetable sector are as follows:
> single area payment scheme, at a minimum of EUR 97.24 /ha;
> redistributive payment: 5 EUR /ha for 1-5 ha inclusive and 48,32 EUR /ha for 5-30 ha inclusive;
> payment for agricultural practices beneficial to the climate and the environment, also called greening payment - 57,17 EUR /ha;
> payment for young farmers - 24,31 EUR /ha.

The Romanian Government also approved the ceilings for transitional national aids in the livestock sector and set the amount for the 2017 payment year, as follows:
> EUR 24.08 million for the decoupled production scheme for the milk sector, the bovine species;
> EUR 101.2 million for the meat sector, the bovine species;
> EUR 50.78 million for ovine / caprine species.

The amount of such subsidies shall be calculated by reporting the amounts to the quantities of milk delivered and/or sold directly eligible, respectively at the number of bovine herds or eligible sheep / goat females.
At the same time, the Executive has approved the EUR 48.5 million ceiling for direct payment for the coupled support scheme for sheep / goat species to be granted for the year 2017. The amount for this scheme is calculated by reporting the ceiling to the eligible livestock.

Romania had the highest economic growth rate in the EU in the first quarter of the year, 5.6% against the corresponding period of 2016, the Eurostat announced. In contrast, the Eurozone reported a 1.7% growth rate, and the EU as a whole 2%.
According to the National Statistics Institute, in the first quarter of the year Romania had a 5.7% economic growth rate compared to the corresponding period of last year, and the Government expects a 5.2% rate for the entire year. The first quarter of 2017 was the 7th consecutive one to report growth.

The figure exceeds the level on which the Cabinet has based the state budget for this year, and which has been seen by many as optimistic. The growth announced by the national authorities has been confirmed by the European statistics bureau, the Eurostat, which says Romania had the highest growth rate in the EU, namely 5.6%.

The Fiscal Council however warns that the GDP growth has been fuelled primarily by consumption. PM Sorin Grindeanu says this performance is a confirmation of the economic measures taken by the Government, as well as the consequence of enhanced confidence from the business environment in the measures announced for the forthcoming period.According to the Cabinet, the growth rate in the first quarter has been heralded by other positive developments in the economy. For instance, exports have reached an all-time high of 5.7 billion euros in March, and in the first 4 months of the year over 100,000 new stable jobs were created. The industrial output also sees substantial increases, while unemployment is at its lowest since 1989.

Upon the presentation of the report on financial stability in 2017, the vice-governor of the national bank, Liviu Voinea, says that, in comparison with the previous report, financial stability has remained robust in Romania, and risks have diminished in intensity and number, but have nevertheless diversified. Also said that a recently emerged risk, which is low for the moment, is that of an increase in real estate prices.

Economic forecasts indicate that Romania will continue to have a growing economy, but below that of 2016, estimated by international financial organizations and various experts at 4.5 to 5.2%. The European Commission expects the growth in 2017 to reach 3.9% from its expectation of 5.2% in 2016, while the World Bank estimates a growth of 3.8% in 2017, the same figure issued by the International Monetary Fund. The European Bank for Reconstruction and Development expects a 3.7% growth, matching Moody's 3.7% estimation, after issuing a forecast of 4.8% for 2016. The National Forecast Commission estimated 4.8% growth for 2016, and 4.2% for 2017.
 
According to a Moody's report, private consumption remains Romania's main engine for growth, though to a lesser extent than in 2016, considering expectations of higher oil prices and inflation. Continuing an expanding tax policy in 2017, including scrapping a tax on special purpose buildings and an additional fuel excise, as well as a cut in the VAT, will result in a deterioration of Romania's fiscal position. The agency expects the fiscal deficit to exceed 3% of the GDP in 2017, since measures increasing it would counter solid economic growth. Moody's expects Romania's credit rating to be negatively impacted by the deterioration of its fiscal policy, along with its effect on its fiscal position.
 
In his turn, economic analyst Constantin Rudnitchi explains: “We also have a piece of good news from statistics, the fact that investments start taking up a bigger slice of this economic growth, therefore this is a good thing, as investment may balance out a bit better against consumption in terms of economic growth".

The construction sector had an important contribution to economic performance registered in 2016, where Romania had the highest growth in the EU in the second quarter 2016.
In the first half of 2016, compared to last year, the volume of construction works increased per total, as gross series, by 5.3%. By structure elements, there were rises in maintenance and current repairs works and in new construction works of 9.7% and by 6.1%, respectively.
By construction objects, there were rises in engineering works and in residential buildings of 8.7% and of 5.4%, respectively. The non‐residential buildings decreased by 0.6%.

The volume of construction works increased per total, as adjusted series by the number of working days and by seasonality, by 5.0%.
By structure elements, there were rises in maintenance and current repairs works and in new construction works of 14.1% and of 3.4%, respectively. The capital repair works decreased by 5.5%.
By construction objects, the volume of construction works increased in engineering works and in residential buildings by 12.5% and by 3.7%, respectively. The non‐residential buildings decreased by 1.5%.

The Romanian real estate market seems to have ended its decline caused by the global economic crisis.
At national level, prices for homes are on average 10% higher than last year, according to a dedicated portal on the web. In late November, the average asking price for apartments was 980 Euro per sqm, which is 52.4% lower than the market peak, in March 2008, when sellers generally asked for 2,058 Euro per sqm. The lowest pricing level was reached in December 2014, when median figures on the above mentioned portal were around 891 Euro per sqm, 10% lower than at present.

The market for older apartments and newly built evolved differently. In Bucharest, for instance, a brand new apartment cost 1,155 Euro per sqm in late October, 55% lower than the March 2008 peak. By comparison, an older apartment is now, on an average, 1,043 Euro per sqm, almost 53% less than on the peak market.
One factor that encouraged the residential real estate market was the 2009 government program called 'First Home',  which grants loans of up to EUR 70,000 with a down payments are only 5%, with below the market interest rates. The program was expanded, and the owners who used the First Home program could purchase a more spacious home with support from the National Loan Guarantee Fund for SMEs.

Romania right now is third in Central and Eastern Europe  after Poland and the Czech Republic in terms of real estate transactions, which in the first ten months of the year amounted to 600 million Euro, according to a study published by Jones Lang LaSalle Romania. In 2014, real estate transactions in this country amounted to 1.15 billion Euro, a record figure for the last few years. This figure was, among other things, a result of the store chain Auchan taking over the Real chain of stores, a transaction between 260-280 million Euro.

The European Commission and the EBRD have upgraded their economic growth forecast for Romania. According to estimates at this point, the European Commission has upgraded its economic growth forecast for Romania in 2015 to 3.5%, as opposed to the 2.8% it expected in May. The GDP is expected to grow by 4.1% in 2016, and by 3.6% in 2017, as a result of better consumption against tax cuts. Inflation is expected to stay at a negative 0.4% this year, and negative 0.3% next year, getting back to 2.3% in 2017. Government debt is expected to go down to 39.4% of the GDP this year, going up subsequently to 40.9% of the GDP in 2016, and to 42.8% of the GDP in 2017. The budget deficit will reach 1.2% of the GDP this year, with 2.8% next year, and 3.7% the following year, according to the European Commission estimates.

The European Commissioner for the Euro and Social Dialogue, Valdis Dombrovskis, said that "economic forecasts suggest that Romania’s economy will improve, which would not have been possible without decisive action in reforming public finance. He also added that continuing structural reform was extremely important, in addition to ensuring the sustainability of public finance and short and medium term economic growth through responsible budget policy".

According to a study conducted by Ernst&Young, Romanian business leaders are confident that their businesses will grow this year, just as the whole economy will. Over one third of business people expect their turnover to increase significantly, while half of them are optimistic about the country’s economic evolution.

The IMF has revised its economic growth forecast for Romania, from 2.7% to 3.4% this year and from 2.9% to 3.9% for 2016.

Romania and Cyprus had the most substantial economic growth in the EU in the first quarter of the year, as compared to the previous three months, according to preliminary estimates released on Wednesday by the European Statistics Office. In figures, thanks to a 1.6% growth rate, the two countries are the EU leaders, followed by Spain and Bulgaria with 0.9% each, Slovakia - 0.8%, and France and Hungary - 0.6% each.
At the opposite pole we find Lithuania, Estonia, Greece and Finland, which have reported decreases. The year-on-year rate Romania has reported, 4.2%, is also the largest in the EU.

However, the geopolitical context requires special attention. The European Bank for Reconstruction and Development says East Europe should strengthen its capacity to withstand shocks, as the countries in the region risk being affected by the political and economic problems in Russia, Ukraine and Greece. Central European countries enjoy an economic recovery supported by domestic demand. However, bad loans are still a problem, while Russia and Ukraine remain in recession, which might affect growth in other countries, says the
EBRD. In addition, it is impossible to estimate the impact of the Greek exit for its neighbouring countries, given that Greek banks are operating in countries like Bulgaria and Romania.
Beyond political promises, Bucharest needs to take concrete social and economic measures to support underprivileged people.

After an increase a Romania’s GDP last year by 2.9% in real terms compared to 2013, one of the highest economic growth rates in the EU, the economic forecasts for this year in Romania indicate a growth of 2-3%. The government, for example, provides in its state budget for an economic growth rate of 2.5%, a cautious target which will nevertheless force a growth rate of more than 3%, depending on external factors, Cristian Socol, an advisor to the prime minister told Agerpres agency. In his opinion, the budget is again focused on investment and the creation of new jobs. “Expenditure dedicated to investment is by 24% higher than in 2014. The 2015 budget also encourages the private sector by increasing co-funding for the absorption of European funds, state guarantees and state aid schemes, more support for farmers, concrete facilities for foreign investments with added value, the development of industrial and technological parks and incentives for technical education”, said Socol.

The 2015 state budget provides for a deficit level of 1.83%, as agreed upon with the International Monetary Fund and the European Commission, and an average annual inflation rate of 2.2%. The market research company Business Monitor International estimates that the Romanian economy will grow by more than 3% this year and in 2016, based on the transition from export-based growth to growth generated by domestic demand. The National Forecast Committee expects an economic growth of 2.5% for this year. The figure is closer to the estimates of the European Commission and the International Monetary Fund of 2.4% and 2.5%, respectively, but below the growth rate of 3.2% predicted by the World Bank in June 2014.

Economic analyst Constantin Rudniţchi speaks about what happens in the private sector: “In the private sector things still do not work as well as we would like them to, or as the macroeconomic parameters indicate. In other words, this economic growth that we have been talking about a lot recently, does not necessarily transfer into the private economy. We are in a paradoxical situation, as figures indicate, there is a lot more stability in the budgetary sector and sometimes even the salary increases come from this sector, rather than from the private economy. This is a proof that the real economy is not yet working properly, that those macroeconomic increases do not translate in real data, that many economic sectors probably still experience difficulties, businesses are affected, they either fail to grow or they grow very slowly, and entrepreneurs are very careful about the salaries they pay to their employees. Although the industry as a whole accounts for roughly 30% of Romania’s GDP, there are only some industrial sectors with good performances, or even specific companies in those sectors, particularly exporting companies and those companies which have substantial sales on the domestic market, namely companies in the oil sector, natural gas sector, the energy sector in general.”

We should also note that Standard & Poor’s rating agency expects Romania’s GDP to grow by an average 2.7% in 2015 – 2017, while Fitch estimates a 3% annual growth rate for 2015 – 2016, as a result of resumed investments, among other factors.

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