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ROMANIA


 

 
Key Economic Data 
 
  2002 2001 2000 Ranking(2002)
GDP
Millions of US $ 44,428 38,700 38,200 52
         
GNI per capita
 US $ 1,850 1,720 1,610 108
Ranking is given out of 208 nations - (data from the World Bank)

REPUBLICAN REFERENCE

Area (sq.km)
230,300

Population
22,364,022 

Capital 
Bucharest 

Currency 
Leu

President 
Ion Iliescu

Private sector 
% of GDP 
40%

  

Background:
Soviet occupation following World War II led to the formation of a communist "peoples republic" in 1947 and the abdication of the king. The decades-long rule of President Nicolae CEAUSESCU became increasingly draconian through the 1980s. He was overthrown and executed in late 1989. Former communists dominated the government until 1996 when they were swept from power. Much economic restructuring remains to be carried out before Romania can achieve its hope of joining the EU. 

Update No: 080 - (01/01/04)

ENERGY

Rovinari lures Franco-Turkish JV

Investors from France and Turkey are interested in setting up a joint venture to jointly operate Romanian power plant Rovinari, pledging investment worth US$600m by 2006. "We will have completed documentation for the joint venture by the end of the2003, while investments will start to flow this year," Romanian Trade Minister, Dan Ioan Propescu, said, investromanian reported recently.

TNK-BP gets out of Petrom sell-off process

Anglo-Russian oil group, TNK-BP, announced its intention not to participate in the sell off process of Romania's national oil company, SNP Petrom, a top official with the country's Trade Ministry said recently, cited by investromania.
"We were told by TNK-BP that they would not submit a non binding offer from Petrom," Trade Minster, Dan Ioan Popescu, was quoted as saying. The ministry plans to sell up to 33.34 per cent stake in Petrom and at the same time the bidder would have to buy newly-issued shares to raise its stake to 51 per cent. The sale process is scheduled to be completed by the end of March 2004. The deadline for non-binding bids was November 10th while the deadline for binding bids has been set for January 31st, 2004.

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FINANCIAL NEWS

IMF "concerned" about surge of consumer credit in Romania


"The recent surge in consumer credit is of particular concern, and will require a tightening of fiscal and monetary policies to contain the impact on inflation and the growing current account deficit," reads a press statement released by the Office of the International Monetary Fund's resident representative in Romania following the visit the IMF delegation led by Neven Mates, to Bucharest. An IMF mission visited Bucharest from 9th - 26th November for initial talks on a precautionary stand-by arrangement, and will return to continue discussions, Rompres News Agency has reported. The policy discussions focused on how to maintain the good performance under the previous IMF arrangement in light of strong domestic demand pressure. 
Structural policies discussed aim at accelerating privatisation, at the issue of remaining loss-making sectors, phasing in energy sector reforms and other measures to ensure sustained economic growth and strengthen Romania's ability to withstand the competitive pressures that will follow EU accession. 
On 27th November the Administration Board of the National Bank of Romania (BNR) was due to adopt a set of measures in order to calm down the increase in the volume of nongovernmental crediting, especially of loans provided to population. 
Following talks with experts of the International Monetary Fund (IMF), it was agreed that BNR adopts new measures to cut down credits, as a severe deterioration of the current account deficit is estimated by the end of this year," the sources explained. 
Among the versions envisaged by BNR officials one can even find the increase of the minimal mandatory levels set by banks to 25 per cent of the total deposits in national currency. Banks currently set with BNR minimal reserves representing 18 per cent of the deposit's attracted in Romanian lei and 25 per cent of term resources in foreign currency. 
The central bank might also ask banks not to expose themselves on the consumer side by more than 10 per cent or 20 per cent of the total portfolio of credits. 
Although IMF is concerned with the evolution of the nongovernmental credit, bank officials are in favour of a rise in this respect, claiming that they can manage the risks in their own portfolios, while economic analysts warn on the possible appearance of macroeconomic imbalance that could affect the banking system on the whole.

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FOOD & DRINK

Soufflet ready to launch major investment project in Bucharest

The French malt producer, Soufflet, intends to invest important amounts of money into a programme targeting its extension towards eastern Europe, including Romania. Bluebull News Agency reports that the EBRD is currently analysing a fund request from the group (65m Euro) to this aim. The overall value of the investment programme reaches 185m Euro, on a four-year schedule. If the EBRD lends some money, it will deliver it in small packages (seven to 20 million Euro each). The project was submitted to the bank on November 9th, 2003.

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TELECOMMUNICATIONS

Mobifon unveils expansion strategy in Transylvania

Romanian mobile phone operator, Mobifon, recently launched its growth strategy for the Transylania region, focusing on meeting the growing communications needs of the people and business in the area and increasing its brand Connex's presence in the region, investromania reported.
"Connex is committed to increasing its visibility in Transylvania by launching an ambitious long term programme consisting of network coverage expansion, special promotions and community support activities," Connex President and COO, Ted Lattimore, was quoted as saying.
Lattimore noted that the US$12m incremental investment in network coverage expansion for Transylvania, and the quality of products and services were the two main reasons "to make Connex number one choice when it comes to telecommunications services."
Connex network has now over 500 GSM stations in Transylvania and Banat and is schedule to expand further in the next year. Intensifying both coverage and capacity in the region, Connex aims to increase its ability to deliver leading services to the vast majority of the population of Transylvania and Banat.
Connex also expects in the coming year to expand regional marketing initiatives. Presently it offers a special post-paid promotion to the people of Transylvania.
The new clients who subscribe to Connex post-paid services by the end of the year will benefit from several discounts in the next 10 months: 50 per cent discount of the subscription fee in the first five months, and 50 per cent discount for Connex to Connex calls in the months six to 10.
According to investromania, all the new clients in Transylvania will receive 20 free minutes monthly, to be used in any national network, during the whole period of the contract.
Under the concept "Atelierele Connex," launched as a part of the new brand concept "Tu Faci Viitorul" (you make the future) Connex is committed to continue and expand support of the most important local eents of the area such as the Medieval Arts Festival in Sighisoara, the Jazz Festival in Sibiu and the Golden Stag Festival in Brasov.

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