Hungarian-owned bank OTP Romania made a loss of around EUR 4.1 million in the first quarter of the year, due to lower operational profit and high risk costs; the bank turned a profit in the same period of 2011. Provisions for non-performing loans went up by 39 percent, to some EUR 11.6 million, whilst its assets were slightly down by 3 percent, to EUR 1.5 billion. The bank’s non-performing loans were up 51 percent on the same period of 2011, to some EUR 181 million, covering 13.6 percent of the gross value of loans, higher by 1.5 percentage points compared to the end of 2011. OTP Romania [...]

Romania’s situation is stable and the country will soon approve a EUR 1 billion credit line from the World Bank, said the country’s Prime Minister Victor Ponta (in picture) on Tuesday evening. He mentioned the local currency’s fluctuation, saying it was fluctuating less than other currencies in the region, and that the Romanian Central Bank (BNR) has all the tools to keep things under control. The EUR 1 billion from the World Bank should be money to hand for unpredictable situations, said Ponta. This will be the biggest credit line the World Bank has ever given Romania. At the [...]

Foreign investments stood at EUR 425 million in the first quarter of the year in Romania, covering 78.1 percent of the current account deficit. Investments were down EUR 19 million on the first quarter of 2011, which saw an external investment of EUR 444 million. Romania’s current account deficit from January to March this year was of EUR 544 million, which was down 43.7 percent on the same period last year. The short term external debt of the country at the end of March was down 2.4 percent on the end of 2011, standing at EUR 22.2 billion, which accounts for 22.6 percent of the total external [...]

Romania’s economy was down 0.1 percent in the first quarter of the year compared to the previous, and thus returned to recession, as this is the second consecutive quarter of GDP decline for the country. The contraction this time was lower. In the last quarter of 2011, Romania’s economy dropped by 0.2 to 0.3 percent. Data from the country’s Statistics Institute also show the situation slightly rosier when compared to the first quarter of 2011 – an increase of 0.3 percent in the raw series and of 0.8 percent when seasonally adjusted. These are the first estimations for [...]

Romania might move a step away from flat tax next year, if the current Government’s proposal to impose differentiated tax levels for personal revenues becomes reality. If the Social Liberal Union (USL) wins the elections in Romania this fall, it plans to introduce differentiated taxation, of 8, 12 and 16 percent for the revenues made by individuals, according to Prime Minister Victor Ponta. The fiscal vision also includes differentiated VAT for agricultural products and plans to reduce contributions to social insurance. “As we took over a budget, while the IMF delegation was in Bucharest, [...]

The annual inflation rate fell to 1.8 percent in April reaching a new historic low from 2.4 percent in March, according to data released on Friday by the statistics institute INS. The central bank targets a 3 percent inflation rate in 2012. The consumption price index (IPC) rose by 0.7 percent month-to-month in April, as food prices feel by 0.11 percent, while non-food products and services added 0.11 percent and 0.17 percent. Prices increased by 4 percent in the last 12 months (May 2011 – April 2012) against the previous year based on the IPC. Euro zone inflation stands at 2.6 percent [...]

At his last mission in Romania Jeffrey Franks (in picture, right), the mission chief  for the country within the International Monetary Fund (IMF) said he ended his mandate knowing he has achieved progress but also feeling sorry for having failed in some areas, like privatizations and naming private managers for state companies. He held his last press conference in Romania yesterday (Wednesday, May 9 ). Franks will be replaced by Erik Jan de Vrijer, who already arrived in Romania for this review mission. Erick Jan de Vrijer, who was IMF’s Europe Department Assistant Director, will start [...]

The privatization timetable slipped and some auctions failed because they were not well prepared, said International Monetary Fund (IMF) Romanian mission chief Jeffrey Franks during his last visit. As a result, the IMF  is now focusing on six companies- Hidroelectrica, Nuclearelectrica, Romgaz, Transgaz and public offers at Tarom and CFR Marfa, . “We tried to focus the program on companies with a greater economic impact and the greatest impact on attracting investors. But are we selling the crown jewels? Even the crown jewels need investments of millions to keep up with a growing economy. [...]