November 15, 2023 UPDATE

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Newsroom, 15.11.2023, 20:00

ECONOMY Romania will
see its economic growth slowing down because of the high inflation, according
to the European Commission’s autumn economic forecast. Romania’s GDP growth has
been adjusted to 2.2%, as against 4.6% last year, because of an inflation rate
above the EU average, of the low foreign demand and limited financing options. The
inflation rate is expected to drop in the next 2 years, restoring the overall economic
balance. In spite of the moderate economic growth at year end, the labour
market remains stable. However, significant increases in salaries and pensions
and the slight increase in governmental spending support a general rise in
private consumption, although retail and services are on a downward trend and
the industrial output is decreasing. On the other hand, tighter monetary policy
and financing conditions have led to a significant slow-down in private sector
loans, with a negative impact on investments. Romania’s real GDP growth rate is
expected to reach 3.1% in 2024 and 3.4% in 2025, while the public deficit is
predicted to stand at 6.3% of GDP this year, 5.3% in 2024 and 5.1% in 2025, as
a result of the fiscal consolidation measures to be implemented as of January.

PENSIONS The new pensions law drafted by the government will next
Monday be discussed in the Chamber of Deputies, which is the decision-making
body for this piece of legislation, having already been passed by the Senate on
Tuesday. The parliamentary majority formed by the Social Democrats and the
Liberals says the law eliminates the inequalities in the system, while the
opposition condemns the lack of funding sources to sustain the considerable
pensions increases planned for next year. The new pensions law favours current
pensioners and penalises those who are still working, the head of the National
Trade Union Bloc Dumitru Costin said on Wednesday, after analysing the document.
Costin also warns that the financial impact will be huge, and the extent to
which it can be covered is unknown.

PRESIDENT The
president of Romania Klaus Iohannis Tuesday began his African tour with an
official visit to Kenya. The tour, which also includes Tanzania, the Republic
of Cabo Verde and Senegal, is the first political and diplomatic initiative at
this level in the past 30 years, and aims to re-launch Romania’s relations with
the countries on the African continent. At a joint press conference on Tuesday,
president Iohannis emphasised the need for Romania to have its own medium and
long term strategy for Africa based on concrete collaboration at government
level, while Kenya’s president William Ruto spoke about the effects of the war
in Ukraine for the African continent. Four agreements were signed in the fields
of environmental protection and climate change, scientific cooperation, food
safety and diplomatic training. On Wednesday, president Iohannis had a meeting
with Kenya’s secretary for tourism and wildlife, Alfred Nganga Mutua, as part
of a visit to the Nairobi National Park.

REPATRIATION The
foreign ministry in Bucharest said another 17 Romanian nationals and family
members left the Gaza Strip via the Rafah checkpoint and are on Egyptian territory, waiting to be
repatriated. The foreign ministry noted the evacuation was the result of
complex efforts from an inter-institutional crisis cell, the Romanian embassy
in Cairo and Romania’s Representation in Ramallah. 220 Romanian citizens and
family members who have been evacuated from Gaza have arrived in Romania.

AGEING Romania is one of the top 10 countries in the world in terms
of population ageing rate, which is likely to put tremendous pressure on the
country’s entire economic system, particularly on its healthcare and pension systems.
The statement was made on Wednesday at the opening of a specialised congress in
Bucharest. Sociological research indicates that 55% of the elderly people in
Romania feel lonely, more than 30% of them only interact with 3-4 people every
month, and 3 in 10 elderly people have no one to rely on in if necessary.

MILITARY
The Romanian Army Wednesday tested the operation of the Patriot surface-to-air missile
system acquired by the Romanian Air Forces in 2020. The test was part of the PATRIOT
SPARK 23 tactical exercise held these days at the Capu Midia shooting range in
the south-east of the country. The Patriot system purchased by Romania is a
state-of-the-art one, able to identify, track and neutralise any type of air
threat. Attending the event were the PM Marcel Ciolacu, the Senate Speaker and
former PM Nicolae Ciucă, and the defence minister Angel Tîlvăr. The Romanian
Air Forces have so far acquired 3 other Patriot systems, which will be
operational by the end of next year. Another 3 systems will be delivered to
Romania under a USD 4 bln agreement. (AMP)