Press Review - June 29, 2017

06.29.2017 By Oana Gavrila

Central Bank Says Banks Tightened Loan Conditions

Banks have tightened lending conditions in the first quarter of the year for consumer and mortgage loans, the central bank said in a report.

Lending conditions have remained unchanged for corporate loans, except for short-term SME financing, where conditions have been moderately tightened, the report showed.

Banks expect to tighten lending conditions even more over the next three months for consumer loans, while changes are expected to be marginal on mortgage loans.

Romania Switches to Budget Deficit in January-May

Romania's general consolidated budget posted a deficit of RON2.2 billion in January-May 2017, or 0.27% of the gross domestic product (GDP), after a surplus of 0.2% of GDP at the end of April, finance ministry data showed.

Revenues to the consolidated budget amounted to RON98.4 billion, or 12.1% of GDP, and were 7.9% higher than in January-May 2016.

Compared with January-May 2016, income tax collections increased 12.9%, social security contribution collections rose 15.9%, tax collections on international trade rose 10.1%, while tax collections on capital income increased 13.2%, the data showed.

Value-added tax collections declined 5% on the year in January-May, as the standard rate was cut from 20% to 19% as of February 1, 2017, after a four-point cut as of January 2016.

Budget expenditure stood at RON100.6 billion, 9.4% higher in nominal terms compared with January-May 2016, while staff spending grew 19.1% due to public sector wage hikes. (romanialibera.ro)

Iohannis Signs Public Sector Wage Bill Into Law

Romanian President Klaus Iohannis on Tuesday signed a bill raising wages in the public sector into law.

The president's office said in a statement Iohannis supports the need to raise public sector wages in a sustainable manner but warned the law has problematic aspects and the ruling coalition should make corrections to ensure it will not trigger economic imbalances.

The bill was adopted by Parliament earlier this month.

Analysts and international institutions including the IMF and European Commission have warned that recent tax cuts coupled with proposed wage raises in the public sector threaten to push Romania's budget deficit past the EU limit of 3% of GDP.  (puterea.ro)

Twelve Romanian Counties Under Yellow Warning for Heatwave

Twelve counties in the western and southwestern regions of Romania have been placed under yellow code for extremely hot temperatures as of Wednesday.

Meteorologists said temperatures will climb up to 33-36 degrees Celsius and the heatwave will intensify on Thursday.

The counties under warning are: Bihor, Arad, Timiş, Hunedoara, Alba, Sibiu, Mures, Caras-Severin, Mehedinti, Dolj, Olt, and Teleorman.

Temperatures will stay above 20 degrees Celsius at night.  (adevarul.ro)