BrexitToRemainia Newsletter #28By CC / In Newsletters / 1 Comments
Who would have thought that Romania’s 5.2% GDP growth in 2017 stands a chance, after all international institutions forecasted 1-2 percentage points lower. First quarter growth was 5.7% but … there are many “buts” and 2018 might be bleak. On the other hand more money should pile in the country if Pentagon’s budget for 2018 European Reassurance Initiative is approved. Coming back to here and now, do join iCEE Fest in Bucharest and see what`s new in digital and tech space. Early bird fares still apply.
Be savvy: know what`s happening right now in Romania. News from politics, economy, business, various industries and social life.
5.2% GDP growth in Romania … but
Few months ago we were teasing the GDP 5.2% growth assumption used in the 2017 budget. It was too elevated compared with all other forecasts from international organisations (of around 3%-4%). Now the figure becomes possible, given the 5.7% growth registered in the first quarter of the year. Most institutions have also revised upwards their forecasts, BUT:
- IMF warned that costs with public wage increase law might be double of what is estimated now (61 vs 32 billion RON, or roughly 6.6% of GDP). This is way above what is happening in similar emerging markets and puts private sector employees at disadvantage
- EBRD upgraded their estimates to 4% GDP growth, warning though of risk that the 3% of GDP deficit limit threshold will be breached
- European Commission just warned Romania on deviation from medium-term budgetary objective (MTO) and also expressed concerns about same 3% GDP deficit requirement
With a 5.2% growth Romania would be expected to come second in Europe in terms of 2017 GDP progress, after Iceland. However, 2018 looks bleaker.
US, NATO and Eastern Europe
The European Reassurance Initiative (ERI) is a program created in 2015 to demonstrate USA’s commitment to the territorial integrity of all 28 NATO nations. It started as reaction to the expansionary strategy of Russia in Crimea and Ukraine. The bad news is that there is reason to believe things will not get better with Russia, given the proposed budget increase for FY2018 by 40%. The good news is that Romania is getting more and more secured as effect of US troops and investments increasing their presence in the country:
- 3 million USD will be allocated to improvement of military infrastructure in Campia Turzii
- 2,2 million USD will go to Mihail Kogalniceanu military base
- 25,000 service members from 20+ ally and partner nations will be around this summer for an annual Black Sea exercise
Take action: grasp opportunities for advancing business in (and/or with) Romania. What others think & do. What business events to attend.
(erratum) Startup Nation and the 200.000 lure
In our previous newsletter we talked about Startup Nation, the child poster of Government’s plans to boost entrepreneurship. There are a few thins not really accurate in our description, as one of our readers (a consultant for the program) highlighted to us. We reflect below the amendments and we thank our reader for taking time to feed back:
- Estimated launch of the project is now planned for beginning of June. [We said end of May]
- The criteria are more relaxed than at the first issue of the proposal (back in January). [We looked at a specific set of criteria (the ones related to previous areas of activity), but beyond that things seem to have gotten better then]
- Favourite sectors: production and IT. [We said IT and creative industries as we read this article where the full code for “IT” is “production and IT programming” (40 points) and second in line are the creative industries (35 points)]
- The system works either via request for payment or reimbursement or a combination of both. [We only mentioned reimbursement, so another good news for entrepreneurs]
- Additional info: There will be maximum of 3 installments for payment/reimbursement and the processing time for each request should be maximum 30 days
PS: We love to hear from you. It feels less like a monologue every other week 🙂
iCEE Fest, 15-16 June, Bucharest
iCEE praises to be one of the largest and the most significant digital and tech related initiatives in the CEE and SE Europe region. This years’ iCEE Fest happens in two week’s time and talks (among others) about:
- Virtual Reality & Augmented Reality
- Tech (adtech, martech, data)
- Apps and mobile
- Digital Health
- Smart living (smart cars, smart homes)
- IAB MIXX Awards 2017
If you book within next 7 days a full conference pass will cost you 250 EUR + fee. If you’re interested in specific industries / presentations (e.g. Fintech, e-Commerce) you ca buy individual tickets between 50 and 75 EUR.
Know your game: Build your Aces for when you meet a Romanian business partner for coffee. What we (might) like to talk about.
Record sale for Brancusi work
Considered a pioneer of modernism and one of the most influential sculptors of the 20th-century Constantin Brâncuși built up his name and career in France. He has a studio up for visiting near Centre Pompidou and various works of art in museums around the world. Recently one of his masterpieces, La muse endormie (1913) was auctioned and sold at an incredible price of $57.4 million. The statue, which was estimated at $20–30 million, is made of bronze with gold leaf. It replicates the original marble version created by the artist in 1909–1910.
Hagi and his (football) kids
If you like football, you must have heard about Gheorghe Hagi. He is the “King” of Romanian football of all times and a darling of Galatasaray fans, who call him “Comandante”. Since 2009 Hagi has invested most of his fortune in his own football team, FC Viitorul Constanta. His tireless work to grow young talent seems to have paid off. Viitorul recently won the 1st Romanian League against CFR Cluj and thus qualified for the 2017–18 UEFA Champions League.
Romanian Overview Report: In this comprehensive report you will find information about: macroeconomic landscape, industries and investments, infrastructure and technology, taxation system, human capital, governmental support and last but not least quality of life in Romania (if you decide to move over here ;)).
Investor Guide Romania: In this well-structured guide you will find information about: investment climate in Romania, economy in general and the business ecosystem in particular, availability of financing, employment and labour law, fiscal policies, as well as how it is for an expat to live in Romania (not too bad, we can assure).