Romania: reluctant state sell-offs restart with CFR Marfa
Slowly but surely, Romania is limbering up for its next sell-off of state-owned companies. Under IMF duress, the country may be about to shed some of its weighty burden of strategically important but failing enterprises.
On Friday, Reuters reported that Romania was launching the sale of a majority stake in CFR Marfa, the country’s rail freight operator. The starting price was set at 797.1m leu ($234m). Continue reading »
Romania and Bulgaria GDP growth: just stagnating along
Romania averted recession in the last quarter of 2012, but can only look forward to a long and slow slog this year as external and internal problems weigh heavy.
GDP crept forwards at a seasonally-adjusted rate of 0.1 per cent from the third quarter, and an unadjusted 0.3 per cent from the fourth quarter of 2011, the National Statistics Institute (INS) announced on Wednesday, giving details of figures published last month. Continue reading »
Erste write-off shows Romania pain
Romania’s economy may be recovering from a deep crisis, but it is not recovering quickly enough for the country’s main lender, BCR.
Austria’s Erste Group this week announced that it would take a €300m goodwill charge largely due to the problems besetting BCR. So even if the International Monetary Fund is reasonably content with Romania’s economic progress, a key foreign investor is far from happy. Continue reading »
Romania holds rates as inflation overshadows sluggish growth
The National Bank of Romania (BNR) kept its benchmark interest rate unchanged at 5.25 per cent on Monday, as policy makers juggled with the conflicting demands of meeting inflation targets and stimulating a flailing economy.
The Romanian leu strenthened slightly against the euro, to 4.40 lei to the euro after opening at about 4.42. Continue reading »
Romania rallies on Ponta’s victory
Could the end to a grim year bring hope for beleaguered Romania? Markets have welcomed the ruling coalition’s landslide victory in Sunday’s election, hoping the country will win a new deal with the IMF and push through reforms in return. But have investors factored in the challenges ahead, or Romania’s fluid political landscape? Continue reading »
Romania: high marks from the IMF
Romania slowly recovering from economic crisis
Romania: pulling out of a serious crisis fairly successfully, but with a long way to go to attain rude economic health. That’s the International Monetary Fund’s conclusion following its latest staff visit to the country.
“Following the severe downturn in 2008–09, the Romanian economy has undertaken a large adjustment to restore macroeconomic stability,” the statement said in its opening line.
After pausing briefly to praise its own role in supporting recovery through stand-by arrangements – as well as that of the EU and World Bank, the Fund continued: Continue reading »
Moody’s: Romania’s not so bad
A diversified economy with good potential for income growth and increased competitiveness, low government debt ratios and an improving fiscal situation. Not a bad report for one of the EU’s poorest countries, wracked in recent years by first economic and political crises.
These are the conclusions of the annual credit report on Romania published by Moody’s. says the country’s Baa3 government bond rating is supported by the fundamentals – which is reassuring even though Moody’s is keeping Romania on “negative” ratings watch. Continue reading »
Romania: another controversial sell-off
Privatisations in Romania have acquired something of a reputation for controversy and confusion. The latest, the urgent sale of chemicals maker Oltchim, has all the hallmarks: a loss-making state enterprise, international pressure for a rapid deal, a controversial tycoon (pictured), maladroit government handling of the case, and now serious doubts about the company’s future.
As of early Monday, Oltchim’s fate hung in the balance. Continue reading »
Romania: central bank walking the growth v inflation tightrope
Romania’s central bank has opted to keep interest rates on hold despite rising price pressures, as the external and domestic economic outlook remains gloomy. But a hike could be on the cards for next year if inflation continues to oustrip target levels. Continue reading »
Romania: reprieve for Basescu
Romanian president Traian Basescu has narrowly escaped the chop.
The constitutional court ruled on Tuesday that the referendum vote to impeach Basescu was invalid because the turnout was less than 50 per cent. So, by a majority of 6-3, the judges ruled that Basescu could remain in office even though 87.6 per cent of those who voted in the July 29 poll wanted him out.
The combative Basescu will quickly throw himself back into the political fray, resuming his battles with the centre-left government of Victor Ponta. But the court decision should appease European Union partners anxious about Romania’s democratic stability. So, the verdict should be mildly positive for investors. Continue reading »
Romania: political crisis raises economic questions
Just as Hungary moved in from the cold a little on Friday, opening the way for talks on a new IMF/EU support package, bigger neighbour Romania was fast moving the other way.
The Romanian leu has touched record lows against the euro as parliament voted to suspend the president in what opponents are calling a power grab by the prime minister’s ruling coalition. The currency could remain under pressure for some time. Continue reading »
Romania: IMF remedy starts to pay off
But will he blow the IMF's trumpet?
While eurozone policy makers thrash out the growth vs austerity debate, the evidence from Romania seems to be that the traditional medicine works.
The IMF has given Romania a qualified thumbs up on it’s economic reforms and recovery. However, the Fund may have praised Romania’s progress, but it still warned of substantial downside risks and that reform still has a long way to go. Continue reading »
Romania: government falls amid public anger at austerity
The Romanian leu suffered its biggest one-day fall this year after the government unexpectedly collapsed in a no-confidence vote.
Prime minister Mihai Razvan Ungureanu’s two-month-old administration is the latest victim of a growing political backlash against austerity policies implemented across the EU.
His successor’s job will be just as difficult. So will the challenges of investing in Romania. Continue reading »
Guest post: can Romania learn from its painful economic past?
By Dan Bucsa of UniCredit Tiriac Bank
Romania was the fastest-growing EU economy in 2008 – and one of the last to come out of recession in late 2010. What went wrong in its recent past? And can similar mistakes be avoided now?
Romanian rate cuts: running out road
Romania’s central bank cut interest rates on Thursday for the fourth time in as many policy meetings, taking rates down to a record low of 5.25 per cent.
The whole 1-percentage-point reduction has been achieved with a barely a twitch in the leu, which has moved little from the 4.35 level against the euro where it when the central bank swung into action in early November.
But this has been achieved against the global rally in emerging market currencies this year. Life will be much harder for the Romanian National Bank if there’s another sudden sell-off, as there was last spring. Continue reading »
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