The World Bank Office, Romania
ROMANIA WEEKLY UPDATE
Wednesday February 11 , 2004
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
Government wants to keep Petrom integrated
after privatization
The privatization commission is currently negotiating
with the short listed bidders clauses related to the
future operations of Petrom, according to the
Romanian authorities . One of the clauses might bind
the investor to keep the oil company integrated after
the privatization. The sale consultant and the IFIs have
reportedly suggested the government to allow the
buyer to split the company after privatization. Most of
the seven short listed bidders have voiced preferences
for certain parts of Petrom, and not for the company as
a whole.
According to a survey run by the National
Institute for Statistics (INS), industry and
trade will continue to expand
Based on a survey presented by the National Institute
for Statistics (INS), industry and retail trade are
expected to register an upward trend in the next
quarter, while activity in the construction sector would
experience a decline at the general level, according to
managers from these three large sectors. 13% of the
managers interviewed considered that the expected
decline of the construction sector would result in job
loses. The opinions of managers were justified by the
adverse weather conditions and the fact that volume of
contracts will continue to remain at the same level as
during the previous period.
Baroness Nicholson insists for suspension of
the EU accession talks with Romania
Baroness Emma Nicholson met on February 9 top
Romanian officials including President Iliescu and PM
Nastase to discuss cross-border child adoptions and
broader political criteria for EU accession. European
Parliament raporteur Nicholson openly accused the
government of mishandling the cross-border adoptions
and the slow reforms in judiciary and public
administration and insists for the suspension of the
accession talks with Romania. The though unlikely
suspension would possibly prevent the government
from closing the negotiation chapters this year and,
quite possibly, the country from joining the EU in
2007. Nicholson supports several amendments to the
Parliament's report on Romania, one of which is for
closer monitoring of progress in implementing
accession policies. Nicholson mentioned that
widespread corruption and limited independence of
journalists, as well as cross-border adoptions, are key
issues to be addressed.
December nominal and real wage earnings
In December 2003 the net monthly average wage
earnings (all economy) stood at ROL 5,658,065 (or
Euro 137), up 12.3% m/m. See attached the dynamics
of the y/y real growth of the net wage earnings in the
second part of 2003.
Jun-03
Jul-03
Aug-03
Sep-03
Oct-03
Nov-03
Dec-03
Real wage index (CPI
deflated)
y/y % change
8.4
8.1
8.0
9.2
7.9
9.0
9.6
The causes of the wage growth towards the end of
2003 were mainly the yearly bonuses paid from the
wage fund, as specified in the collective labor
contracts, and the payments for not effected leaves and
for extra hours. The highest net wages were paid in
December in the financial intermediation sector
(insurance and pension activities excluded) 18,468,959 ROL [US$ 559] and in the industry of
tobacco products - 15,214,066 ROL [US$ 460].
Banks will apply the new norms on crediting
the population starting February 2004
After the publishing by the Romanian National Bank
(BNR) of the prudential norms for the consumption
and mortgage credit at the end of last year, the banks
are expected to apply them starting this month. The
conditions required by the norms are: a 25% prepay of
the value of a mortgage credit and a monthly
installment not exceeding 35% of the net family
income; and a warrant or a 25% anticipated payment
of the value of the goods bought, and a monthly
installment of maximum 30% of the monthly family
income for consumption credit.* The banks lent in
2003 to the population the equivalent of ROL
75,000bn (2.2bn USD), with around 10% increase in
December alone. More than half of the borrowing was
contracted for consumption goods, while the mortgage
credit amounted to ROL 19,000bn (572 mil USD).
The value of the consumption credit increased by ROL
4,000bn (120 mil USD) during the past month, while
mortgage lending expanded by ROL 1,000bn (30 mil
USD).
Additional information can be found at www.bnro.ro
The reference interest rate of the National
Bank
The reference rate of the
National Bank of Romania
will be 21.25 percent per
year in February 2004,
equal to the rate set for
January.
(Please
see
attached the evolution of
the reference rate over the previous 6 months.) The
yield paid by the Treasury for latest 12m T-bills issue
stood at 18% at the end of January.
Feb-04
Jan-04
Dec-03
Nov-03
Oct-03
Sep-03
21.25
21.25
20.41
20.19
19.25
19.11