1. Market Research
  2. > Financial Services
  3. > Banking Market Trends
  4. > Romania Country Report - February, 2016

Romania Country Report - February, 2016

  • March 2016
  • -
  • Emerging Markets Direct Media Holdings
  • -
  • 36 pages

EXECUTIVE SUMMARY

The report covers info as of March 11.



The key stories regarding Romania's macroeconomics at this moment are the sustainability of the high growth rates (3.7% y/y in 2015) and the impact of the datio-in solutum bill - a bill under which banks customers could abandon the mortgage contracts with no further liability in addition to the collateral.



There is little doubt that there was the consumption that pushed up GDP last year.

Consumption has contributed 4pp to the GDP growth in 2015, while gross fix capital formation only 1.8pp. Consumption increased by 5.3% y/y in full 2015 and accelerated to 6.4% y/y in Q4. The investments have increased since 2014, when they decreased by 3.1% y/y, but they remain at a low level both in absolute terms and as a percentage of GDP compared to the pre-crisis peak of 2008.



Key Points



oRomania raises EUR1.25bn upon re-opening 10-yr, 20-yr Eurobonds

oPublic debt to GDP ratio down 1.2pp y/y to 38.6% at end-2015

oGDP up 3.7% y/y in 2015, driven by consumption

oNet investments rise by 8.4% y/y in 2015 from low base

oIndustrial growth eases to 2% y/y in Q4; 2.8% y/y in full 2015

oConstruction works up 11.7% y/y in Q4; 10.4% up y/y in 2015 on maintenance, repair of roads

oRetail sales 15.6% y/y up in January; accelerates from 8.9%b y/y in 2015

oHeadline inflation plunges to minus 2.1% y/y in January on VAT rate cut and further sinks into negative area to minus 2.8% y/y in February, on energy prices

oC-bank governor considers monetary policy tightening

oWages surge by 11.1% y/y in Q4 and accelerates to 14.1% y/y in January

oRomania's banks achieve EUR1.1bn net profits in 2015, on EUR82bn assets

oBanks' profitability above EU average despite high NPL ratio, c-bank finds

oPwC expects Romanian banks to sell EUR2.5bn of NPLs in 2016

oOverdue loans to banks ease by 18% y/y to EUR4.6bn at end-January

oEBA NPL drops to 13.6% at end-2015, 7.1pp down y/y

oBanks extend EUR843mn new loans in January, 31% up y/y

oBIS-reporting banks cut exposure to Romania by 3.2% of GDP in 4Q ending Sep-15

oFOB trade gap widens 59% y/y to 3.6% of GDP in 2015

oExports shrink 1.6% by y/y, trade gap keeps widening in January

oGross external debt down by 2.2% of GDP in 2015, after hike in 2009-2014

Table Of Contents

Romania Country Report - February, 2016
EXECUTIVE SUMMARY5

FOCUS STORY: Datio in Solutum bill for mortgage loans6

Senate endorses key mortgage bill6

RELATIONSHIP WITH IFIs7

IMF is visiting Romania for Article IV Consultations starting March 27

POLITICS7

Government schedules local elections for June 57

President of Romania's small but influential UNPR party resigns amid corruption allegations8

REAL SECTOR9

1. Corporate, structural reforms9

2. GDP, forecasts9

GDP up 3.7% y/y in 2015, driven by consumption9

Net investments rise by 8.4% y/y in 2015 from low base11

3. Industry, Constructions, Retail13

Gross use of primary energy up 2% y/y to 32.9mn toe in 201513

Construction works up 11.7% y/y in Q4; 10.4% up y/y in 2015 on maintenance, repair of roads14

Retail sales 15.6% y/y up in January; accelerates from 8.9%b y/y in 201515

4. Prices, Inflation16

Headline inflation plunges to minus 2.13% y/y in January...16

5. Labour Market18

Wages surge by 11.1% y/y in Q4....18

... and accelerates to 14.1% y/y in January19

Labour costs grow 11.4% y/y in fourth quarter19

ILO unemployment falls to 6.5% in January19

FISCAL SECTOR20

1. Budget Execution20

General government posts 0.63% of GDP seasonal surplus in January20

Romania raises EUR1.25bn upon re-opening 10-yr, 20-yr Eurobonds21

2. Public Debt22

Public debt to GDP ratio down 1.2pp y/y to 38.6% at end-201522

3. EU budget23

Romania sees EUR168mn of EU funds frozen23

Current EU funds absorption for 2007-2013 stagnates m/m at 63.5% at end-Feb23

FINANCIAL SECTOR24

Banks' profitability above EU average despite high NPL ratio, c-bank finds24

PwC expects Romanian banks to sell EUR2.5bn of NPLs in 201624

MONETARY POLICY25

C-bank governor considers monetary policy tightening25

BANK REGULATIONS25

Senate endorses key mortgage bill25

Romania's banks achieve EUR1.1bn net profits in 2015, on EUR82bn assets25

1.Bank Loan Quality26

Overdue loans to banks ease by 18% y/y to EUR4.6bn at end-January26

2. LOANS, DEPOSITS27

Bank loans 2.8% up y/y in Jan despite 1.1% contraction in Nov-Jan27

Banks extend EUR843mn new loans in January, 31% up y/y27

BIS-reporting banks cut exposure to Romania by 3.2% of GDP in 4Q ending Sep-1529

3. NON-BANK30

Romania's insurance market 8.2% up y/y in 2015, close to pre-crisis peak30

Owners of Romanian insurers Carpatica and Astra face criminal charges30

Leasing market 21% up y/y to EUR1.6bn31

EXTERNAL SECTOR31

1.Balance of Payments31

C/A gap widens 2.6 times y/y, to a moderate 1% of GDP in 201531

2. Foreign Trade32

FOB trade gap widens 59% y/y to 3.6% of GDP in 201532

Exports decelerate to 2.1% y/y growth in Q4; 4.1% y/y in 201533

Exports shrink 1.6% by y/y, trade gap keeps widening in January33

Government considers increasing the budget for the subsidies given to investors34

2.External Debt35

Gross external debt down by 2.2% of GDP in 2015, after hike in 2009-201435

3.Forex Reserves36

Forex reserves down EUR854mn in February36





Table 1: Industrial production [%, y/y]13

Table 2: Construction Works Volume Index [%, y/y]15

Table 3: Retail Sales Volume Index [% y/y]16

Table 4: Consumer, Producer Prices [%, y/y]18

Table 5: Wages, employment20

Table 6: General government budget [RON mn]22

Table 7: Romania's gross public [RON, EUR bn, % of GDP +breakdown]23

Table 8: Romania CA balance Jan-Dec 2015 [BPM6]32

Table 9: Foreign Trade33

Table 10: External debt [EUR mn]36





Fig. 1: Seasonally adjusted GDP10

Fig. 2: Drivers of GDP growth, utilisation side [main elements]11

Fig. 3: Drivers of GDP growth, utilisation side [detailed]11

Fig. 4: Drivers of GDP growth, formation side11

Fig. 5: Industrial production [2010=100]13

Fig. 6: Industrial Production, seasonally and workday adjusted [2010=100]13

Fig. 7 Industrial Production, not adjusted, 12-m average y/y13

Fig. 8: Construction Works Index [2010=100]14

Fig. 9: Construction Works, seasonally and workday adjusted [2010=100]15

Fig. 10: Construction Works, seasonally and workday adjusted [2010=100]15

Fig. 11: Retail Sales Index, seas. adj. [2010=100]16

Fig. 12: Retail Sales Index, seas. adj. [2010=100]16

Fig. 13: Consumer Price Index [y/y]17

Fig. 14: PPI vs. CPI [y/y]17

Fig. 15: Industrial production price: domestic vs. external18

Fig. 16: Average net wage [2000=100]19

Fig. 17: Employment vs. unemployment20

Fig. 18: Romania's public debt [% of GDP]23

Fig. 19: Banking system's net profits [EUR]26

Fig. 20: NPL ratio27

Fig. 21: Overdue payments on bank loans27

Fig. 22: Stock of non-gov bank loans [EUR mn]27

Fig. 23: Non-government deposits29

Fig. 24: Foreign trade balance [EUR mn]32

Fig. 25: Rolling 12M exports [EUR mn]32

Fig. 26: Forex Reserves at BNR36


View This Report »

Get Industry Insights. Simply.

  • Latest reports & slideshows with insights from top research analysts
  • 24 Million searchable statistics with tables, figures & datasets
  • More than 10,000 trusted sources
24/7 Customer Support

Talk to Veronica

+1 718 514 2762

Purchase Reports From Reputable Market Research Publishers
Blockchain Technology Market - Global Industry Analysis, Size, Share, Growth, Trends, and Forecast 2016 - 2024

Blockchain Technology Market - Global Industry Analysis, Size, Share, Growth, Trends, and Forecast 2016 - 2024

  • $ 5795
  • Industry report
  • January 2017
  • by Transparency Market Research

Global Blockchain Technology Market: Overview Blockchain technology offers a secure, fast, and cheaper medium of carrying out online transaction and online transfer of information without the need of third ...

Mobile Payment Technologies Market - Global Industry Analysis, Size, Share, Growth, Trends and Forecast 2016 - 2024

Mobile Payment Technologies Market - Global Industry Analysis, Size, Share, Growth, Trends and Forecast 2016 - 2024

  • $ 5795
  • Industry report
  • February 2017
  • by Transparency Market Research

Global Mobile Payment Technologies Market: Overview This report provides an analysis of the global mobile payment technologies market for the period from 2014 to 2024, wherein the period from 2016 to 2024 ...

Top 10 Telecom Technologies - Forecast to 2021

Top 10 Telecom Technologies - Forecast to 2021

  • $ 5650
  • Industry report
  • February 2017
  • by MarketsandMarkets

“Reduction in queuing & transaction time and increased convenience in making low value payments are driving the contactless payment market” The contactless payment market is estimated to grow from ...


ref:plp2016

Reportlinker.com © Copyright 2017. All rights reserved.

ReportLinker simplifies how Analysts and Decision Makers get industry data for their business.