From the BBJ:
Romanian land costs 5 times more than in Poland – says Polimeni
25 Jul 2007
bbj.hu
American developer Polimeni International, which announced investments worth €300 million ($414 million), has completed its first two acquisitions on the domestic market, after paying €28 million ($36.3 million) for two plots of land located in Galati and Satu Mare, where it intends to develop two shopping centers.
“We made our first land acquisitions two months after the official entry of Polimeni on the Romanian market, unlike the Polish market, where our first transaction was made after three years, with the project starting a year later,” Stefan Gheorghiu, country manager of Polimeni International, told ZF. The land acquired in Galati, located close to the ring road, has a surface area of around 100,000 square meters, with the American developer paying around €20 million ($26.9 million) for the plot.
The company intends to build a shopping centre with a lettable area of around 55,000 square meters, as well as a 1,600-spot car park. As for the shopping centre in Satu Mare, it will have a lettable surface area of around 20,000 square meters, and will be developed on land purchased for €7 million ($9.4 million). Therefore, the price paid per square meter of land in Galati stands at around €200, whereas in Satu Mare the cost of land per square meter stands at €350.
According to Vincent Polimeni, the majority shareholder of the Polimeni group, land prices in Romania are five times bigger than in similar areas in Poland. "However, tenants are willing to pay a higher price, given the opportunities available on the Romanian market," explained Polimeni. “The construction of the two shopping centers will start this year.
The mall in Galati is scheduled for completion in December next year, whilst the mall in Satu Mare is expected to be finalized in the Q1 of 2009,” added Gheorghiu. The company has so far conducted a series of commercial and residential projects in both the USA and Poland, and made its decision to enter the Romanian market after being attracted by the potential of the retail market, which is burgeoning. (zf.ro)
Wednesday, July 25, 2007
Monday, July 23, 2007
Romania unemployment rate falls to 7.0% in Q1 2007
According to the International Labor Organization, the unemployment rate for this year was 7.0%, with 0.2% less than the one registered in the previous trimester and with 0.8% than the rate registered last year informs the National Statistics Institute on Monday.
The rate evaluated by ILO was 1.8% higher than that announced by the National Agency for Employment in Romania.
By gender criteria, male unemployment stood at 7.8% while unemployment among women stood at 6.2%. In cities, the rate rises to 8.1% while in rural areas it falls to 5.8%.
The unemployment rate affected mostly individuals who graduated secondary schools and highschools as the rate was 7.5% and 8.0% as compared to university graduates, whose rate was 3.1%
The rate evaluated by ILO was 1.8% higher than that announced by the National Agency for Employment in Romania.
By gender criteria, male unemployment stood at 7.8% while unemployment among women stood at 6.2%. In cities, the rate rises to 8.1% while in rural areas it falls to 5.8%.
The unemployment rate affected mostly individuals who graduated secondary schools and highschools as the rate was 7.5% and 8.0% as compared to university graduates, whose rate was 3.1%
Sunday, July 22, 2007
Romanian Population 2020
The Romanian population would drop almost 20% by 2050, an Allianz Global Investors report shows on Monday. Bulgaria on the other hand will lose a third of its population by the estimated date while Poland - only 10%.
According to the report, the fertility rate in Central and Eastern Europe ranges between 1.24 and 1.42 children/woman. For its population to remain constant, the fertility rate should be 2.1.
Thus, the population of the 11 countries analyzed, will diminish by 15% amounting to 16 million persons, by the end of 2050.
Likewise, the ratio of retired people to workers would rise to 50 in 2050 from the current 20. The ratio will grow steadily, reaching 33 by 2035 and 50 by 2050.
To counteract demographic tendencies and economic transformations, 8 countries analyzed including Romania introduced new mandatory pensions system to diversify the revenues of the retired people.
The countries analyzed in the report are Bulgaria, Croatia, the Czech Republic, Estonia, Latvia, Hungary, Lithuania, Poland, Romania, Slovakia and Slovenia.
According to the report, the fertility rate in Central and Eastern Europe ranges between 1.24 and 1.42 children/woman. For its population to remain constant, the fertility rate should be 2.1.
Thus, the population of the 11 countries analyzed, will diminish by 15% amounting to 16 million persons, by the end of 2050.
Likewise, the ratio of retired people to workers would rise to 50 in 2050 from the current 20. The ratio will grow steadily, reaching 33 by 2035 and 50 by 2050.
To counteract demographic tendencies and economic transformations, 8 countries analyzed including Romania introduced new mandatory pensions system to diversify the revenues of the retired people.
The countries analyzed in the report are Bulgaria, Croatia, the Czech Republic, Estonia, Latvia, Hungary, Lithuania, Poland, Romania, Slovakia and Slovenia.
Thursday, July 19, 2007
Labour Shortage in Romania
From the BBJ today:
Romania faces workforce crisis
19 Jul 2007
bbj.hu
Romania faces a workforce crisis, Labor Minister Paul Pacuraru said on Wednesday.
“Demand on the labor market is high. All sizable investors who came to Romania began inquiring whether we can ensure the necessary workforce,” said Paul Pacuraru at a press conference in Iasi, eastern Romania. According to the minister, there is a labor shortage of 25 million persons affecting the entire European Union. As for the settlement of the crisis faced by Romania, Pacuraru said that there are two pools that can cover this deficit: the academic environment - the curricula of which need to be adjusted to the requirements of the labor market - and the rural environment, still insufficiently capitalized on, plus the administrative structures or state-owned companies. Another way to settle the problem, according to the minister, is to bring back home the workforce that migrated abroad. “It's awkward that we import Asian workforce whereas our people leave for work to other countries,” underscored Pacuraru.
Romania faces workforce crisis
19 Jul 2007
bbj.hu
Romania faces a workforce crisis, Labor Minister Paul Pacuraru said on Wednesday.
“Demand on the labor market is high. All sizable investors who came to Romania began inquiring whether we can ensure the necessary workforce,” said Paul Pacuraru at a press conference in Iasi, eastern Romania. According to the minister, there is a labor shortage of 25 million persons affecting the entire European Union. As for the settlement of the crisis faced by Romania, Pacuraru said that there are two pools that can cover this deficit: the academic environment - the curricula of which need to be adjusted to the requirements of the labor market - and the rural environment, still insufficiently capitalized on, plus the administrative structures or state-owned companies. Another way to settle the problem, according to the minister, is to bring back home the workforce that migrated abroad. “It's awkward that we import Asian workforce whereas our people leave for work to other countries,” underscored Pacuraru.
Monday, July 9, 2007
Romanian Trade Deficit Up 70%
The Romanian Trade deficit rose to EUR 4.05 billion in late March, up 72.1 percent from the first quarter of 2006.
The National Institute of Statistics said Romania waived customs duties following EU accession and shifted to the single trade policy of the European Union. A significant share of the deficit reported for the first three months (approx. EUR 3 billion) was triggered by exchanges with EU Member States, which account for over 70 percent of the country’s foreign trade.
Exports went up by 8.4 percent in RON (14.2 percent in EUR) and imports picked up 23.6 percent in RON (30.1 percent in EUR) compared with the corresponding period of 2006. Increases in noon-food products tariffs pushed up inflation by 0.52 percent in April, while consumer prices also picked up by 0.52 percent, the highest monthly increase this year. The annualised inflation went up from 3.66 percent in March to 3.77 percent in April. The overall average price rise over the past 12 months (May 2006 – April 2007) as against the previous 12 months (May 2005 – April 2006) calculated against the CPI is 5.1 percent, and the increase calculated against the harmonised index of consumer prices is 5.2 percent.
The National Institute of Statistics said Romania waived customs duties following EU accession and shifted to the single trade policy of the European Union. A significant share of the deficit reported for the first three months (approx. EUR 3 billion) was triggered by exchanges with EU Member States, which account for over 70 percent of the country’s foreign trade.
Exports went up by 8.4 percent in RON (14.2 percent in EUR) and imports picked up 23.6 percent in RON (30.1 percent in EUR) compared with the corresponding period of 2006. Increases in noon-food products tariffs pushed up inflation by 0.52 percent in April, while consumer prices also picked up by 0.52 percent, the highest monthly increase this year. The annualised inflation went up from 3.66 percent in March to 3.77 percent in April. The overall average price rise over the past 12 months (May 2006 – April 2007) as against the previous 12 months (May 2005 – April 2006) calculated against the CPI is 5.1 percent, and the increase calculated against the harmonised index of consumer prices is 5.2 percent.
Monday, July 2, 2007
IMF Criticizes Romania Intention to Raise Pension
From See.net
This decision may result in increasing the inflationary pressures and in deepening the current account deficit, according to those declared by the High IMF Representative in the region, Juan Jose Fernandez – Ansola.
The International Monetary Fund (IMF) criticized Romania on Friday in relation to its plans to substantially raise pensions, declaring that this decision could result in increasing the inflationary pressures and in raising the current account deficit, according to Mediafax quoting Reuters.
“Even if we understand that pensions are small, the fiscal decisions need to consider the existence of budgetary limits and they should not be made in the absence of conducting a macro-economic environment analysis”, as Juan Jose Fernandez – Ansola (photo), High IMF Representative in the region, said. Imports grow fast during a time when companies are upgrading their structures and Romanians are constantly trying to improve their living standards, after decades of poverty during Communism, according to Reuters, and the strong RON appreciation affects imports, thus contributing to widening external deficit to over 10 per cent of GDP.
“We were already considering a current account deficit of around 13 per cent of GDP in 2007,” Fernandez – Ansola declared.
“Until now, Romania has not experienced issues related to funding its own imbalances, but there are always levels which once exceeded may pose the country in a difficult situation – in my opinion, Romania is heading towards this,” Ansola added.
Fitch: raising pensions increases the downward revisal risk of Romania rating
The intention of the Romanian authorities to raise the state pensions by almost 100 per cent, over the next two years, increases economic over-heating and fast RON depreciation risks, and it could have a negative impact on rating, as shown recently by Fitch Ratings agency, according to Mediafax.
“Provided that this measure is fully implemented in 2008, without reducing other expenditures or increasing taxes, for balance reasons, then there is a strong incentive for an economy that already confronts with the over-heating risks. This would be a negative development in terms of rating perspective”, as declared in an interview for Reuters by Andrew Colquhoun, Fitch analyst. The rating agency maintains the qualification “BBB”, with a stabile prospect, but it continues to monitor the economic situation, as Colquhoun specified.
Risks
“Such a steep raise will be felt in the budget, somewhere to over EUR 2 bn, around 2 per cent of GDP, and the effort will be on long term, and the amounts will be eventually taken from investments. Replacements are considered in relation to the required resources, even by changing the tax philosophy so far used,” as Sebastian Vladescu declared for Mediafax.
Minister of Labour, Paul Pacuraru, explained that the financial resources for covering these raises result from economic growth, from the elimination of the contribution threshold in case of those with over five average salary in economy as well as from charging taxes on the incentives and bonuses paid to employees and which were not taxed so far. It is for the first time when a serious move is made, according to those declared by the business analyst Ilie Serbanescu for Realitatea TV.
Liberal and Social-Democrat leaders accused each other over the weekend of trying to gather electoral capital over the passage of a crucial law providing a significant increase in pensions as of January 1.Social-Democrat Party (PSD) leader Mircea Geoana told a press conference on Friday that the pension increase is probably his party’s most important project ever and the most important project adopted by Parliament in years, Mediafax reported. Meanwhile, Democrat Gheorghe Barbu said the pension increase was a populist measure, a cold element in the image strategy disputed by PNL and PSD. PNL leader and Prime Minister Calin Popescu Tariceanu retorted that the PSD attempt to gain credit over the pension increase is a big lie. “These measures are initiated by the government. PSD is trying to show that they had a contribution. PD should be ashamed for saying they are populist measures,” he said. On Saturday, Geoana slammed Tariceanu’s statements as an “embarrassing attempt” to gain electoral capital. “This project had been debated by Parliament for over six months. If PSD hadn’t forced their hand and threatened with a no-confidence vote, it’s very likely that Mr. Tariceanu wouldn’t be thinking of pensioners’ fate, as he hasn’t for two years and a half,” said Geoana.
This decision may result in increasing the inflationary pressures and in deepening the current account deficit, according to those declared by the High IMF Representative in the region, Juan Jose Fernandez – Ansola.
The International Monetary Fund (IMF) criticized Romania on Friday in relation to its plans to substantially raise pensions, declaring that this decision could result in increasing the inflationary pressures and in raising the current account deficit, according to Mediafax quoting Reuters.
“Even if we understand that pensions are small, the fiscal decisions need to consider the existence of budgetary limits and they should not be made in the absence of conducting a macro-economic environment analysis”, as Juan Jose Fernandez – Ansola (photo), High IMF Representative in the region, said. Imports grow fast during a time when companies are upgrading their structures and Romanians are constantly trying to improve their living standards, after decades of poverty during Communism, according to Reuters, and the strong RON appreciation affects imports, thus contributing to widening external deficit to over 10 per cent of GDP.
“We were already considering a current account deficit of around 13 per cent of GDP in 2007,” Fernandez – Ansola declared.
“Until now, Romania has not experienced issues related to funding its own imbalances, but there are always levels which once exceeded may pose the country in a difficult situation – in my opinion, Romania is heading towards this,” Ansola added.
Fitch: raising pensions increases the downward revisal risk of Romania rating
The intention of the Romanian authorities to raise the state pensions by almost 100 per cent, over the next two years, increases economic over-heating and fast RON depreciation risks, and it could have a negative impact on rating, as shown recently by Fitch Ratings agency, according to Mediafax.
“Provided that this measure is fully implemented in 2008, without reducing other expenditures or increasing taxes, for balance reasons, then there is a strong incentive for an economy that already confronts with the over-heating risks. This would be a negative development in terms of rating perspective”, as declared in an interview for Reuters by Andrew Colquhoun, Fitch analyst. The rating agency maintains the qualification “BBB”, with a stabile prospect, but it continues to monitor the economic situation, as Colquhoun specified.
Risks
“Such a steep raise will be felt in the budget, somewhere to over EUR 2 bn, around 2 per cent of GDP, and the effort will be on long term, and the amounts will be eventually taken from investments. Replacements are considered in relation to the required resources, even by changing the tax philosophy so far used,” as Sebastian Vladescu declared for Mediafax.
Minister of Labour, Paul Pacuraru, explained that the financial resources for covering these raises result from economic growth, from the elimination of the contribution threshold in case of those with over five average salary in economy as well as from charging taxes on the incentives and bonuses paid to employees and which were not taxed so far. It is for the first time when a serious move is made, according to those declared by the business analyst Ilie Serbanescu for Realitatea TV.
Liberal and Social-Democrat leaders accused each other over the weekend of trying to gather electoral capital over the passage of a crucial law providing a significant increase in pensions as of January 1.Social-Democrat Party (PSD) leader Mircea Geoana told a press conference on Friday that the pension increase is probably his party’s most important project ever and the most important project adopted by Parliament in years, Mediafax reported. Meanwhile, Democrat Gheorghe Barbu said the pension increase was a populist measure, a cold element in the image strategy disputed by PNL and PSD. PNL leader and Prime Minister Calin Popescu Tariceanu retorted that the PSD attempt to gain credit over the pension increase is a big lie. “These measures are initiated by the government. PSD is trying to show that they had a contribution. PD should be ashamed for saying they are populist measures,” he said. On Saturday, Geoana slammed Tariceanu’s statements as an “embarrassing attempt” to gain electoral capital. “This project had been debated by Parliament for over six months. If PSD hadn’t forced their hand and threatened with a no-confidence vote, it’s very likely that Mr. Tariceanu wouldn’t be thinking of pensioners’ fate, as he hasn’t for two years and a half,” said Geoana.
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