The World Bank Office, Romania
ROMANIA WEEKLY UPDATE
Wednesday June 30 , 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
April nominal and real wage earnings
Privatization process for Electrica Oltenia and
Lower profit and income taxes from next year
Electrica Moldova
In March 2004 the gross monthly average earnings
were ROL 8,292,765 (or Euro 204) and the net
monthly average wage (all economy) stood at ROL
5,969,555 (or Euro 147), up 1.9% m/m. See attached
Aug-03
Sep-03
Oct-03
Nov-03
Dec-03
Ian-04
Feb-04
March-04
Aril-04
Real wage index (CPI
deflated)
y/y % change
8.0
9.2
7.9
9.0
9.6
7.1
8.2
11.7
7.1
May inflation
the dynamics of the y/y real growth of the net wage
earnings in the second part of 2003 and first part of
2004. he rise of net average earning was determined
by: payment of bonuses and incentives in the
following activities: forestry and related services,
extraction of hydrocarbons and related services, food
and beverages, tobacco products, crude oil processing,
coal coking and nuclear fuel treatment, rubber and
plastic products, metallurgy, medical, precision,
optical and photographic apparatus and instruments,
watches and clocks, other transport means, water
collection, purification and distribution, land transport,
air transport, insurance and pension funding, refuse
disposal and used waters, salary negotiations in the
following activities: road transport means, water
transport.
Additional
information
http://www.insse.ro/
can
be
The government has published on April 14 the
privatization announcement for the next two electricity
distributors to be privatized The privatization strategy
will be the same as for Electrica Banat and Dobrogea,
namely a direct sale of 25% stakes plus a capital
increase to reach 51%. All five bidders having
submitted letters of interest for Electrica Oltenia and
Electrica Moldova electricity distributors have been
validated by the Economy Ministry, according
Romanian media. The five are Public Power
Corporation from Greece, EON from Germany, Union
Fenosa from Spain, AES Corporation from US, and
CEZ from the Czech Republic.
found
at
The monthly CPI-measured inflation rate in May 2004
stood at 0.3 % m/m, according to data released by the
National Institute for Statistics (INS).
Consumer
pricemeasured
inflation
Total
Food
Non-food
Services
May 2004
compared
with:
Apr2004
0.3
0.0
0.5
0.6
Dec2003
3.1
2.2
3.8
3.8
Monthly average
inflation rate during
1 I – 31 V
2004
0.6
0.4
0.8
0.8
2003
0.9
1.2
0.8
0.6
The government forecasts a 9% end-of-period
inflation this year. Price of food products remained the
same in May. In 2002-2003, food prices have
constantly increased at a slower rate than the headline
inflation, while services prices have increased at a
steeper pace.
Additional
information
can
be
found
at
http://www.insse.ro/
The profit tax rate will be cut from 25% to 19% as of
next year, Finance Minister Mihai Tanasescu
announced on June 15. In order to compensate this
cut, the dividend tax rate will be increased by 5pps to
15% for companies and 10% for individuals. The new
regulations will also allow quicker depreciation.
Separately, the income tax rates will be cut from 18%40% to 14%-38%. The contribution to the social
security budget will decrease by 2pps prompting a
reduction in the firms' overall contribution to the
social protection funds from 49.5% of the gross wage
to 47.5%. Romanian and foreign business people
hailed the government's decision to cut taxes by
saying that this move, apart from encouraging
investors and business operations, will bring
additional revenues to the state budget.
Foreign trade
FOB exports achieved during 1.I-30.IV 2004
amounted to EURO 5,816.0 million, by 17.0% more
than during 1.I-30.IV 2003. In April 2004, exports
amounted to EURO 1,484.0 million, by 24.5% more
than in April 2003, overruning the growth rate of
imports for the first time a after eight months.
In the structure of exports by goods, five sections hold
69.6% of total exports, as follows: clothing articles
made of fabrics, knitted or crocheted -23 %,
machinery and mechanical devices, electric
machinery, appliances and equipment; reproduction of
sound and video recording -17.6%, metallurgical
products -14.9%, mineral products (crude oil, oil
products, ores, coal, cement, salt etc.) 7.3% and
footwear and similar 6.8%
By groups of countries, as compared to 1.I-30.IV 2003
period, exports to the European Union increased by
14.1%, representing 66.5% of the total exports.
Exports to Central and Eastern European countries
increased by 51.2%, and represented 10.5% in total
exports.