Q2 / Average monthly income per capita in Romania has risen to nearly RON 1,600: Changes in redistribution of family budget
Data published by INS for the second quarter of 2018 show that Romanians’ monthly incomes have reached nearly RON 1,600 per person. They were RON… Mai mult›
According to the data released by Eurostat, Romania’s current account deficit exceeded, in the second quarter of the year, the threshold of five percentage points… Mai mult›
Strategic chemical industry: Romania, on top in import increase and ranking last in EU in terms of increase in exports outside single market
Data published by Eurostat show that Romania recorded the second highest annual growth rate in imports of non-EU chemicals from 2007 to 2017 (13.1% per… Mai mult›
Rising incomes have fuelled consumption and, implicitly, the economic growth in recent years, but not the savings. Although a large proportion of the population… Mai mult›
Total turnover in the IT sector increased by 11 percentage points in 2017 compared to 2016 and exceeded the four billion euro threshold forecasted, according… Mai mult›
de Marin Pana , 17.9.2018
Eurostatistics is a synthesis based on a set of standardized and harmonized benchmarks for the comparability between countries at the European level (Principal European Economic Indicators – PEEIs in English).
These indicators are published and reviewed monthly, in order to provide a synthetic picture of a national economy and recent developments.
Here is the way it looks, on the website of the EU statistical body, a selection of the indicators of interest for the way Romania is seen from the outside, from the perspective of the centralized analysis at the level of the EU and the conclusions that can be drawn from recent economic evolutions:
- Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018
- Labour costs (%, Q/Q4)
- Turnover in the services field (%, Q/Q4)
- Employment (Q/Q-1)
- Job vacancy rate (%)
- Housing prices (%, Q/Q4)
- Current account
- Mar 18 Apr 18 May 18 June 18 July 18 Aug 18
- Unemployment rate (%)
- Industrial production (%, M/M-12)
- Construction (%, M/M-12)
- Long-term bond yield (%/year)
- Euro/RON exchange rate
Firstly, the steady increase in labour cost draws attention, an increase well above the economic advance and constantly speeding up.
What does not appear (because of the dilution in the overall average) in European statistics is even more important, namely the significantly intensified rhythm of increases in the public sector compared to the private sector.
It is noteworthy in this context that since the beginning of 2017 the turnover evolution in the services sector was far from keeping up with the evolution of revenues which rose far beyond the productivity advance and were reflected in the evolution of labour costs. But the service sector is predominant in the GDP structure in any advanced economy.
With the benefit of a slowdown in the inflation index, the extra money went at a significant proportion to the real estate sector. This is where heavy struggles take place to maintain it, at the very least, within the macroeconomic stability benchmark of + 6% displayed on the scoreboard in Q2 2017, then moderated but returned to the trouble area earlier this year.
The employment, set on the downward trend in Q3 2017, returned to better values in the two following quarters, although the job vacancy rate slightly increased back from 1.1% to 1.3%, namely where it was also at the beginning of 2017. The signals are that it is becoming increasingly difficult to find people with certain specializations and skill levels.
The unemployment rate has maintained constant and relatively low compared to the European average, but it would look quite different after adjusting it with those who went to work abroad. Here is the explanation of the relatively low budget revenue collection as a share of GDP (about 70% of the EU average), although the taxation level is not low. But with 70% of the country’s workforce left, we can only have 70% of the revenue collection at a 100% load of those who stayed to support the state budget.
Incidentally, what about the social solidarity between generations in terms of paying the pensions? Those who stayed to work in Romania also support the parents of that 30 % who went to more promising places. Who, from higher wages, also send money home directly to those who are jointly supported by lower wages offered in the country.
For now, the evolution of industrial production, the one that sets the tone for the whole economy, remains robust, but the merits belong exclusively to the private sector, as there is no involvement of the state in terms of significant investments. The latest data on the construction sector also shows a recovery, but the trend remains to be confirmed in the next quarters.
Unfortunately, yields of government long-term bond rose above the 5% level at the beginning of Q3 2018 and will have consequences on interest payments, already up by 20% in the first seven months of the year, despite the decrease in the public debt share in GDP.
In spite of the current account deficit increase and the decrease in economic performance, including an increase in the trade deficit, the euro/RON exchange rate remained relatively stable and even returned to slightly lower levels in the summer months, as the attempt of exceeding the threshold of 4.65 RON/euro has been halted in the middle of the year.All in all, data show that we should curb the forced march of increasing incomes, be they wages or pensions, to correlate them much more closely with the labour productivity and the results of the real economy. While not yet problematic, the picture of the economic data monitored by Eurostat raises questions about the macroeconomic stability.
Something that is like health, which you do not value enough until you lose it.
Lăsați un comentariu
Only Cluj-Napoca is among the 22 European cities that will receive financing from the European Regional Development Fund (FEDR) for innovative solutions in addressing urban… Mai mult›
Prime Minister Dancila dismissed 13 of 15 civil society representatives from Economic and Social Council. They were blocking legislation that did not gathered all opinions
Prime Minister Viorica Dancila has replaced 13 of the 15 civil society representatives in the Economic and Social Council (CES). Following a decision published on… Mai mult›
West Quadrilateral / Four counties joined to directly access European money for major infrastructure projects
From right to left: Gheorghe Falca, Nicolae Robu, Ilie Bolojan. Emil Boc, Mayor of Cluj Napoca, misses Four mayors from the West of the country… Mai mult›
Chamber of Deputies / PSD loses UDMR’s support for amending Offshore Law, draft returns to committees for a week
The plenum of the Chamber of Deputies decided on Wednesday to resend the Offshore Law to committees after a seemingly surprising request of UDMR leader… Mai mult›
The Government adopted on Thursday the draft Emergency Ordinance for amending and supplementing legislation in the field of insolvency, which provides among other things for… Mai mult›
Unlike the vast majority of the economic areas, in which we are at the bottom of the European ranking, Romania succeeded to rank 7th by… Mai mult›
There are clear signs that the lobbying action launched by the ruling coalition in Brussels in favour of the government in Bucharest will end with… Mai mult›
MFP: Romania does not endorse a separate budget for Eurozone and rejects the idea of taxing financial transactions
Romania does not endorse a separate budget for Eurozone and rejects the idea of taxing financial transactions, Minister of Public Finance Eugen Teodorovici said after… Mai mult›
Finance Ministry wants to change rules for insolvency: state could also register claims after procedure is launched
Companies’ possibility to avoid paying creditors (and in particular the payment of tax receivables) simply by declaring their insolvency would be drastically limited, according to… Mai mult›
Prime Minister Viorica Dancila, European Commissioner Phil Hogan and Agriculture Minister Petre Daea The swine fever epidemics in Romania has an impact on neighbouring countries,… Mai mult›
Infrastructure projects lost EUR 41.5 million following budget amendment. In what projects cuts have been made
Despite the assurances that Dancila government is concerned and intensely working on the road infrastructure projects, at the budget amendment the Transport Ministry has cut… Mai mult›
Leaders of the political groups in the European Parliament have decided to adopt in October a resolution on the rule of law in Romania. The… Mai mult›
"Romania's buffers have deteriorated, the country is less prepared for a negative shock" - IMF will reduce economic growth estimate
Romania will be less prepared if the economy is hit by a negative shock, as the structural deficit has been deteriorated - IMF representative for… Mai mult›
Premiere: CSAT asks Finance Ministry to amend amendment - session suspended until Government comes with a draft that does not affect budgets of secret services
President Klaus Iohannis suspended on Tuesday the CSAT meeting for discussing the budget amendment, as there was no consensus on the budgets of institutions from… Mai mult›