Investors expect that the announcement on the signing of a new agreement could hike demand for RON-denominated bonds. On the other hand, secretary of state within the Finance Ministry Liviu Voinea has a budget deficit target of 1.7 pc of GDP.
The IMF’s evaluation mission will return to Bucharest in mid-January when the final evaluation of the agreement currently in force will take place and the terms of the new agreement will be negotiated, an agreement that will most likely be approved in February, Finance Minister Florin Georgescu stated at the Bucharest Forum, an event organized by the Aspen Institute Romania, Mediafax informs. The Finance Minister pointed out that that the IMF mission will return to Bucharest around January 15 when it will be certain that the 2013 budget will be completed irrespective of who forms the new government. The agreement signed with the IMF in the spring of last year should have been finalized in March 2013, its early finalization suggesting that most of the terms yet to be fulfilled by the Romanian side will be transferred to the new agreement, terms that mainly concern structural reforms, the timetable of privatizations and of introducing private management in particular. At the same time, the yields of Romanian Eurobonds climbed on Friday to the highest level in the last month, investors expecting that the announcement on the signing of a new agreement could hike demand for RON-denominated bonds, Bloomberg informs, being quoted by Mediafax. The yield of EUR-denominated bonds with 6-year maturity climbed by 4 base points (or 0.05 percentage points) to 4.75 per cent, the highest level since October 4. On the same subject, an Erste report shows that the signing of a new agreement with the IMF would consolidate investor confidence during an otherwise difficult period, representing “good news” for financial markets. The bank expects an economic growth of 0.7 per cent of GDP this year, and a hike to 1.9 per cent in 2013, estimates that are more pessimistic than the ones issued by the European Commission and the IMF. Erste analysts also note that they are more pessimistic in what concerns the growth of investments too, while their forecast on private consumption is similar to that of European experts.
Privatization proceeds to be invested in strategic companies
The proceeds from the upcoming privatizations will be invested in strategic state-owned companies in the energy and transportation sectors where Romania has unused resources, Finance Minister Florin Georgescu added on Friday. He considers that “well thought and well implemented” privatizations will be one of the government’s priorities, simultaneously with restructuring state-owned companies and rendering them more efficient. According to the Finance Minister, the restructuring of the public sector will have to be accompanied by rendering the private sector more efficient and by strengthening financial discipline, pointing out at the same time that it is necessary to improve the ratio between freedoms and responsibilities. In what concerns fiscal stimuli, Georgescu pleaded in favor of a gradual relaxation that would be backed by job creation and productivity hikes, in order not to affect the state budget. In his turn, secretary of state within the Finance Ministry Liviu Voinea stated that in 2012 Romania continued the fiscal adjustment process started in 2010 and will do so next year too, the general consolidated budget’s deficit set to drop from 2.2 per cent as forecast for 2012 to 1.7 per cent in 2013.
Geoana: Romania can propose a project for the future
Aspen Institute Romania President Mircea Geoana stated on Friday, during the same event, that despite the political turmoil and the difficult economic situation Romania could pull herself together and propose a national project for the following years. He pointed out that the businessmen, specialists and politicians that took part in the Bucharest Forum proposed a pact for the Romanian economy and expressed his optimism that “Romania can be put back on the map of international economic interest, of American and European interest, towards the Eurasian area,” and that there are prospects of a hike in American investments in Romania, apart from the two countries’ strategic and political relation.
Survey: 70 pc of Romanians have difficult time finding jobs
Almost 70 per cent of Romanians believe that it is very difficult to find a job at this moment, most of them believing that there are scant options when it comes to choosing one, the Reveal Marketing Research survey presented at the Bucharest Forum shows. The survey shows that although Romania has one of the lowest unemployment rates in Europe – an average of 7.1 per cent in the first nine months of this year – the respondents nevertheless consider that the number of available jobs is small. According to the survey, less than 10 per cent of Romanians (8.9 per cent) are pleased with the number of available jobs.In what concerns the job market’s evolution in the next three months, Romanians seem more optimistic: 11.2 per cent of them expect a hike in job offers, the same survey shows.