ROMANIA WEEKLY UPDATE
The World Bank Office, Romania
Wednesday November 5 , 2003
The material published in this newsletter is compiled by the World Bank's Bucharest office and staff in Washington, and on the basis of publicly available information. It does not
represent the opinion of the World Bank or any other official body. No responsibility for factual accuracy can be taken
IMF
Following the successful completion of the stand-by
agreement on October 15, the government and the
IMF are discussing the possibility of engaging in a
precautionary agreement next year. An IMF mission
arrived in Bucharest on November 5 for the
discussions. The issues to be discussed with the
government include the 2004 budget and the deficit
financing, as the government expressed its intention to
direct privatization proceeds toward infrastructure
projects, and the underlying macroeconomic
projections involved in the budget process. The
pension system, the mining and energy sectors are also
included on the discussion agenda.
October inflation
CPI-measured inflation rate in October 2003 stood at
1.5 % m/m, and in the first ten months of this year at
11.2%, according to data released by the National
Institute for Statistics (INS). The average monthly
inflation rate in first ten months of 2003 was 1.1%,
compared with 1.2 % in the first ten of 2002. End of
period inflation target for 2003 is 14 %.
Consumer
price
measured
inflation
Total
Food
Non-food
Services
October 2003 compared
with:
Sep2003
1.5
1.2
1.0
3.9
Dec
2002
11.2
9.4
2.9
11.9
Oct2002
15.8
14.7
17.1
15.2
Jan-Oct
2003
average
monthly
inflation rate
1.2
1.0
1.4
1.6
January – September industrial output
9M industrial output (both unadjusted and adjusted
series) went up 3.3% y/y. Progress was triggered by
the processing sector, up 4.0% y/y in 9M and the
electric and thermal energy & gas & water sector, up
2.8% y/y. In September 2003 industrial output went up
3.7% (unadjusted series) and 0.2% (series adjusted for
the number of working days) as compared with the
same month of 2002 (see the table below).
Provisional data
September
(Sept 2002 = 100,
% change)
Unadj.
3.7
Total
Mining&quarrying
9M 2003
compared with
9M 2002
Adjust 1 Unadj.
0.2
3.3
6.9
4.5
-2.7
4.0
0.2
4.0
Adjsut 1
3.3
-2.7
4.4
Processing
Energy & gaz &
water treatment and
-4.4
-5.4
2.8
2.8
distribution
1) Series adjusted for the number or working days
August nominal and real wage earnings
In September 2003 the net average wage earnings (all
economy) stood at ROL 4,881,658 or US$ 144.4 ,up
1.5% m/m. See attached the dynamics of the y/y real
growth of the net wage earnings.
Jan-03
Feb-03
Mar-03
Apr-03
May-03
Jun-03
Jul-03
Aug-03
Sep-03
Real wage index (CPI
deflated)
y/y % change
10.5
10.5
8
7.8
8.9
8.4
8.1
8
9.2
Electrica Banat and Electrica Dobrogea
Enel (Italy) has submitted the only preliminary, nonbinding offer for electricity distributors Electrica
Banat and Electrica Dobrogea, according to Lucian
Boghiu, the head of Romania’s national power utility
Electrica. Reportedly, the Italian company has made a
preliminary offer to invest $1bn in the two
distributors, which provide electricity to southern and
western regions of Romania. Under the privatization
strategy, any buyer must buy 25% of the companies’
shares and then carry out a capital increase to raise its
stake to a majority. The privatization of the two
electricity distributors is part of Romania’s agreements
with the IFIs. Romania is also expected to sell its two
gas distributors under the same agreements.
9M foreign capital subscribed in Romania reaches
EUR 753 million
Total foreign capital subscribed in companies
registered in Romania over the first nine months of
2003 has amounted to EUR 753.1 million (USD 879.1
million), according to the data released by the
National Commerce Registry. The sum includes the
value of the capital brought by newly registered and
old companies. The capital share value in foreign
currency invested in Romania after 1991 reached at
end-September € 8.65bn (USD 10.09bn), invested in
a number of 95,645 companies. Top foreign investors
(ranked using the capital subscribed) are the
Netherlands, France, Germany and the USA.
August unemployment
The official registered unemployment rate declined to
6.5% of the active civilian population in September
2003, from 6.6% in August, 6.9% in July and 7.7% in
September 2002, according to the Labor Ministry. The
number of registered unemployed at end September
was 608.8 thousands, down from 619,2 thousands at
the end of August.