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Romania - Business News

Key findings for Romania from the 14th Annual Global CEO Survey
(18/05/2011)

As recession fears subside, optimism seems to return amidst the Romanian business community. The perspectives for growth in Romania seem highly appealing for the local CEOs, 70% of which state that they are very confident in their company’s prospects for revenue growth in the next three years, a significantly higher level of confidence than that shown by the CEOs from the more mature markets of the EU (47%). Quite remarkably,

Romanian CEOs seem to mirror the medium term optimism of top managers from highly dynamic emerging markets such as China, where 72% of CEOs have expressed high confidence in the prospects for revenue growth in the next three years.

  • The perception of foreign analysts regarding Romania’s economy for the next six months improved in March as Romania advanced a position compared to February up to the third place among Central and Eastern European countries, a ZEW survey reads, quoted by news agency Mediafax.

  • The index measuring the expectations of financial experts for Romania increased by 11.1 points to 44.5 points

Romania's inflation rate at 5 pct, economic growth 0.6 pct this year
(11/03/2011)


Romania's inflation rate will be 5 pct this year and 4.5 pct in 2012, meaning that it stays rather high, said ING Bank Romania chief economist Nicolae Chidesciuc. According to the cited expert, the bank expects Romania's economy to grow 0.6 percent in 2011 and 3.5 percent in 2012, respectively. 'This year, all sectors of the economy will witness growth, less constructions, which will be in the negative. The rest will all go upwards. Even agriculture will see a slight increase,' said Chidesciuc. According to him, 'lending will further stay feeble, flatlined at 5 percent.' ING Bank Romania recorded in 2010 a gross profit of RON 128 million (1 euro trades for RON 4.20), up 52 percent from 2009 as a result of lower costs with risk provisions.

BNR expecting inflation to fall below 4pct at end-2011

The National Bank of Romania (BNR) is expecting inflation in Romania to fall below 4 percent at the end of 2011, from 7 percent in January, BNR Governor Mugur Isarescu told a Gulf Co-operation Council - Romania business forum on business opportunities in Central and South-Eastern Europe held in Bucharest by Forum Invest.

'In Romania, there is a structural component of inflation that makes it hard to drop. The Romanian economy is now open and tends to take over unfavourable things from outside and make them domestic. When it comes to favourable things, there is inertia. Inflation doubled in the second half of 2010, to 8 percent, but more than half of this inflation was fiscal in nature as a result of an increase in the excise duties and the Value-Added Tax. I cannot say that BNR is optimistic, because inflation is an insidious illness, but we have to keep it in check. In January it dropped from 8 percent to 7 percent, it should stay at 7-7.5 percent throughout this summer, and fall to 4 percent in August-September and, hopefully stay at 4 percent et the end of the year,' said Isarescu.

He mentioned that for the time being there are two unknowns: the rise in food prices, which he said will be a reflection in Romania of what is happening in the world, although with its major farm potential Romania should have been sparred, and the developments in the oil prices. BNR is expecting oil prices to fall bellow $100 per barrel, to maybe $80, and a correction in the fuel prices in Romania.

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Unadjusted series industrial output drops 3.7 pct in January 2011
(11/03/2011)

The industrial output dropped 3.7 percent in January 2011 from the previous month as unadjusted series and increased 1 percent as working day and seasonally adjusted series, reports the National Institute of Statistics.

The unadjusted series decrease was triggered by the decline in the mining industry (6 percent) and in the manufacturing industry (4.5 percent). The electricity, gas, steam and air conditioning supply increased 2.3 percent.

The industrial output, working day and seasonally adjusted series, increased 1 percent compared with the previous month due to the growth registered in all industrial sectors: in the manufacturing industry (1.3 percent), in the mining industry (1.2 percent) and namely in the electricity, gas, steam and air conditioning supply (0.7 percent).

Compared with the similar period of 2010, in January 2011 the industrial output (unadjusted series) increased 11.9 percent, supported by the growth registered in all industrial sectors: in the manufacturing industry (14.3 percent), in the electricity, gas, steam and air conditioning supply (3.5 percent) and in the mining industry (1.6 percent), Agerpres reports.

The industrial output, working day and seasonally adjusted series, increased 10.6 percent compared with the similar month of the previous year, due to the growth registered in the manufacturing industry (12.9 percent), in the electricity, gas, steam and air conditioning supply (3.4 percent) and in the mining industry (0.6 percent).

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Copos says his electrical engine plant is a Top 100 exporter
(11/03/2011)

Businessman George Copos, who controls electrical engine plant Ana Imep in Piteşti, which posted 21.6 million-euro turnover last year, says his company must be included among the top 100 biggest local exporters, considering exports make up 95% of the plant's business.

On Monday, ZF published the Top 100 biggest exporters in Romania ranking based on data sent by the Romanian Chamber of Commerce and Industry, which included only seven Romanian-held companies, among which Interagro, controlled by Ioan Niculae, state-owned Oltchim and Grup Servicii Petroliere, held by Gabriel Com`nescu.

The top 100 exporters on the local makret accounted for 52% of the total exports of Romania last year, that is 19 billion euros, according to the Chamber of Commerce.
Copos' electrical engine plant could be the eighth Romanian held company in this exporter ranking.

"Intra-community and export deliveries of 2010 account for 95% in total turnover posted by Ana Imep. We exported to the UK, Italy, Turkey, Czech Republic, Poland, Ukraine, France and other countries," stated George Copos, who bought the factory in 1996.
For 2011, Ana Imep budgeted 10% higher turnover amid rising exports.

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Romania's stadium for next year's Europa League final is in trouble
(11/03/2011)

Before the 1986 European Cup final, Steaua Bucharest trained at the 23 August Stadium because it was the only stadium in Romania with floodlights, but it is some time since the arena has carried any sort of sheen of modernity. British journalists who were there for the Champions League third qualifying round tie between Dinamo Bucharest and Manchester United in 2004 remember huddling in the rickety press box, wondering what would happen if the lightning that was flashing around the sky hit the metal roof which was joined to the metal desks and the metal seats by yellow-painted metal struts. Others remember crumbling concrete, weeds poking through and a general sense of decay.

The good news is that the old stadium has been demolished and is in the process of being rebuilt. The designs are ambitious – ambitious enough that the Europa League final is scheduled to be hosted there next season – and on a visit last month, even veiled in snow, the half-built arena was undeniably impressive, the steepness of the stands suggesting a ground that could fizz with atmosphere.

The problem is that it is not finished and, although construction is due to be completed in July, a row over funding means is likely to be delayed and could even be stopped entirely. There is still €110m (£94.5m) to be paid to complete construction but the general council of Bucharest is under pressure to clear debts to the company that runs buses in the city – the Bucharest Autonomous Transport Company – and the company that provides hot water and heating (Radet). It has cut that to €35m (£30m) and so work has ground to a halt. This being an international crisis, it may not come as a huge surprise that Bono has managed to become embroiled in it.

The mayor of Bucharest, Sorin Oprescu, is apoplectic. "They've made everything look crazy!" he said. "It's like they're hallucinating! They want to raise an unrealistic amount of money for some subsidies, so where do they take the money from? The National Arena. But they want to take the credit for the construction of the stadium afterwards and say they paid for it.

"We all know that the new stadium is something we should all be proud of. We also know we'll have the Europa League final in 2012; it's something of deep national prestige. We have to build the stadium. I want a supermodern arena, at the highest Uefa standards. The government had a duty to finance the project, as we did."

The government, in fact, has a stake in the stadium but has been accused of delaying payments. "It wasn't until two months ago that the government awarded some money for the stadium," Oprescu went on. "We knew the importance of this project for Romania and that's why for three years we alone supported the construction of the stadium. The government has some unresolved issues. It's incredible how they treat the citizens of Bucharest, the city and the entire country. The Ministry for Development is good only when it comes to inaugurations. The people need to know what's happening. It's just a battle for image and a big bluff from the governing party."

Oprescu was a member of the Social Democratic Party (PSD) until he stood for mayor. They are in opposition to the governing party, the Liberal Democrats (PDL), and it is the rivalry between the PDL and himself that Oprescu believes is behind the decision to cut funding. "They want to block us from finishing the stadium," he claimed. "The government wants to come as the big saviour in all this. They want to take all the credit for this project – which isn't mine but it isn't theirs either."

The Romanian Football Federation (FRF), not surprisingly, has reacted with dismay. "I can't understand how those people can halt the construction," said the general director, Ionut Lupescu. "It's incredible. Their behaviour makes me sick. I think every citizen in Bucharest feels the same as I do. It would be shameful for us to lose the Europa League final. The stadium should have been ready a year before the final so we could host at least 10 or 15 games there to see how the system works. We need this stadium."

The FRF can be at least indirectly blamed for a lot of what is wrong in Romanian football but in this they are at the mercy of the whim of politicians. "This isn't just about football," said the FRF president, Mircea Sandu, "but about Bucharest and Romania, of course. It was a political decision to build the stadium in the capital city, now we have to finish it. It's very strange how things stand right now. The general council needs to react maturely. The people who can decide have to think about the impact a competition like the Europa League would have on Romania. In Europe nobody knows about their battles but everyone knows about the Europa League final. I think the president of the country can solve this – I'm sure he can settle things down."

There was little conciliatory, though, about the tone of Elena Udrea, the minister for development who is overseeing the construction. "Oprescu's words surprise me," she said. "The government assured the citizens they won't have problems with public transport and that their houses will be warm enough when they come home from work. Oprescu is lying when he says that the PDL is blocking him. None of the projects he is talking about are his; all the investment projects are initiated and sustained by PDL. I can assure the citizens in Bucharest that the stadium will be done. The cost of building has gone up under Mr Oprescu's tenure from €140m to €300m."

Oprescu was unimpressed. "If the stadium is finished, it will have Elena Udrea's name on it," he sneered. "I hope that after the finalisation of the arena we can start bringing benefits to the city. We had millions invested. In 2008 I took over a big hole in the ground and today the stadium is almost ready. On 9 August I hope we'll have the inaugural game against Argentina and after that I will try to get another three big events on at the National Arena. It's a rule imposed by Uefa and we have to respect it in order to have the Europa League final on 12 May 2012."

One of those big events he wants is a U2 concert in September. "We are very pushy with U2's representatives," Oprescu said. "I want them in Romania. They have to include us in their schedule. We want them here in September. Romania deserves this concert."

Maybe it does but more than that it needs the Europa League final. Just as the awarding of Euro 2012 to Poland and Ukraine suggested western Europe reaching out to east, accepting it as a viable venue, so at a lower level hosting the Europa League final suggests Uefa's faith in Romania. Mess that up and the consequences both for Romania's relationship with the rest of European football and for its self-image could be far worse than missing out on a visit from Bono.

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Romanian Deficit Better than Expected, Meets IMF Targets
(05/01/2011)

Romania registered a budget deficit of 6.6% of the GDP in 2010, which is lower than the target of 6.8% demanded by the IMF over a bailout aid package.

According to a letter of the Romanian government sent to the International Monetary Fund, Romania has met all requirements for a new tranche of the IMF-EU bailout that it has been getting since 2008, Mediafax reported.

In addition to meeting the deficit requirement, the Romanian government has managed to reduce the state arrears and the number of public jobs below the rates demanded by the IMF.

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