Daily Economic Briefing – August 9, 2013

NBR Exchange Rates 08.08.2013

Coface forecasts a GDP growth of 1-1.5%, the agriculture effect not being considered

Coface estimates that the economy will grow this year by 1%-1.5%, the forecast disregarding the contribution of agriculture to the GDP, factor that varies greatly from year to year, so the advance may reach 2% including the effect generated by the agricultural sector. The International Monetary Fund has recently improved Romania’s economic growth forecast to 2% this year and 2.25% next year, amid higher exports in the first half and a better agricultural production. Minister for Budget Liviu Voinea has previously stated that the economic growth estimate for this year had been lifted, following talks with the IMF, from 1.6% to 1.9%, the Government estimating however for the end of the year a GDP growth above the new target, Mediafax informed.

EFIN: 54% of the citizens prefer medium-term deposits

More than half of citizens (54%) choose medium-term (six months) saving products, according to a survey conducted by Millennium Bank and the financial services portal Efin.ro. Approximately 70% of the respondents answered positively at the question whether they use to make savings, and most persons (54%) stated they keep their savings with banks, according to the survey. Regarding the currency they choose to save in, 76% said they would choose RON-denominated products.

Erste Group (BSE: EBS) has fully repaid the EUR 1.76bn received in 2009

Erste Group Bank AG yesterday repaid in full the participation capital issued in 2009, worth a total of EUR 1.76bn, of which EUR 1.22bn subscribed by the Republic of Austria and EUR 540mln subscribed by private investors, a bank’s press release informs. During 2009-2012, the Republic of Austria received annual dividends amounting to EUR 98mln from Erste Group and private investors collected EUR 43mln. In total, including the dividends for 2013, proportional to the holding period, which will be distributed in June 2014, after the approval by the General Meeting of Shareholders, the Republic of Austria will have received the amount of EUR 448mln and private investors – EUR 198mln.

Renewal of contracts for logistic spaces, at the maximum of the past three years

Renewal of contracts for logistic spaces and modern warehousing totaled 80,000sqm in H1 2013, the highest level recorded so far on the local market, according to a report by CB Richard Ellis (CBRE) on the industrial market in our country for H1 2013. This record is due to the large number of contracts signed for five years during 2008-2009, which expire in this period, the report also shows. The total trading activity in January – June was intense, reaching around 153,000sqm, the highest level recorded from H1 2011 to date, the report mentions. The total trading activity in Bucharest stood at over 99,400sqm in the first half of the year.

Coface: “Romania, champion in terms of insolvencies in Eastern Europe”

Romania recorded more insolvencies than eight countries of Eastern Europe together, in 2012 and in H1 2013, according to Coface Romania, in conditions in which, in our case, the number of companies is three times lower than the total number of companies in Slovakia, Slovenia, Estonia, Lithuania, Latvia, Bulgaria, the Czech Republic and Croatia. At the end of the first half this year (H1), 12,739 companies were in various stages of the insolvency proceedings in our country, down 10% compared with the same period last year, when 14,218 new insolvencies were opened. Although the number of insolvencies initiated this year decreased for the first time after 5 years of continuous growth, auspices of 2013 present an increase in insolvencies of medium and large companies, according to Coface representatives.

In Q2 2013, slightly lower revenues for Romtelecom and Cosmote Romania

Incomes of Romtelecom and Cosmote Romania, owned by the Greek operator OTE, fell in the second quarter compared to the same period last year, according to the financial statement published by the Greek group. Thus, Romtelecom incomes witnessed a decline of 4.9%, reaching a total of EUR 148.7mln, compared with EUR 156.3mln reported in Q2 2012. As for the mobile telephony company Cosmote Romania, the decrease was only of 2.1%, the total revenues recorded by the company in the second quarter amounting to EUR 111.4mln, compared to EUR 113.8mln in the same period last year.

Vae Apcarom (APC) posted in H1/2013 a net profit of over RON 1.458mln

Romanian railroad equipment manufacturer VAE Apcarom, company of the voestalpine Group, recorded in the first six months this year a net profit of over RON 1.458mln, up 6.11% compared with the same period in the previous year, according to the financial statements submitted to the Bucharest Stock Exchange (BSE). In the first six months of 2012, the company’s profit exceeded RON 1.374mln. In terms of total revenues, they exceeded RON 57.469mln, up 55.91% compared to incomes achieved during January – June 2012. Expenses increased to RON 55.321mln, compared with RON 35.273mln in H1/2012. The number of employees increased to 211 people at the end of the first half this year. The net turnover amounted in the first six months of 2013 to RON 46.553mln.