Romania Country Report - April, 2016

April 21, 2016

The report covers info as of April 20.
The datio in solutum bill is on the verge of being promulgated in a form harshly criticised by banks.

Key Points
• S&P affirms BBB- rating for Romania; risks tamed by low public, external debt
• Public debt to GDP ratio down 1.32p to 37.8% at end-Jan
• Romania’s C/A deficit widens 8 times y/y to 0.2% of GDP in Jan-Feb
• IMF raises Romania’s GDP growth forecast to 4.2% in 2016
• World Bank ups Romania’s 2016 growth projection to 4%, warns on risks of excessive deficit
• Romania revises upward 2015 GDP growth to 3.8%
• Industry grows by only 0.8% y/y in February; output in past 12 months increased by 2.2% y/y, decelerating from 2.8% y/y calculated at the end of 2015
• Retail sales growth accelerates to 21.8% y/y in February; services rendered to Romanian households 20% up y/y in February
• Construction works 8.7% up y/y in February
• CPI deflation deepens in March to minus 3% y/y
• Net wages in Romania up real 15.8% y/y in February
• ILO unemployment flat at 6.5% in February
• Revenues to budget 6% above target in Q1, VAT collections 10%-15% down y/y
• President Iohannis returns law on macroprudential supervisory body to lawmakers
• Central bank maintains monetary policy rate at 1.75%; hikes expected for next year
• Romanian banks could sell €3bn of NPLs this year, KPMG says
• Banks keep extending mortgage loans to households at fast pace in February
• New consumer loans to households 66% up y/y in Jan-Feb
• Exports return to high growth in February: 9.5% up y/y
• Annual FOB trade gap 70% up y/y to 3.9% of GDP at end-February

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