4th June
2007
Local tourists opt for the Romanian Black Sea
Foreign investments in hotels will increase the number of tourists by 15 pc during
this summer as against 2006, Ovidiu Silaghi, Minister of SMEs, Commerce, Tourism
and Liberal Professions said.
It is expected that foreign investments in hotels will raise the number of tourists
on the Romanian seaside by 15 per cent as against the previous year, Minister
of SMEs, Commerce, Tourism and Liberal Professions, Ovidiu Silaghi said on Saturday
while in a visit at the Black Sea Coast.
According to State Secretary for Tourism within the Ministry, Lucia Murariu who
accompanied the Minister, the sales of tour operators in May advanced by 50 per
cent this year compared to those registered last year.
Bulgaria, the main tourist competitor is no longer such a big danger this year:
“One may say that the tourism related war with Bulgaria is half won based
on this rationale. Romanian tourists will reconsider the Romanian seaside”,
Silaghi specified.
Beaches should shift from the administration of Ministry of Environment to that
of local councils, for being better managed, according to Ovidiu Silaghi.
Related to the projects that the Ministry envisages for supporting Romanian seaside
tourism, Silaghi said that a decision was promoted providing for six-month redundancy
payment of those who worked for six months on the seaside, along with the Seaside
Law.
The Minister showed discontent in relation to the situation of Olimp resort prior
to the opening of the summer season. He affirmed that discussions with AVAS board
were envisaged targeting a fast privatization of the resort, according to The
Money Channel.
Hotels Amfiteatru, Panoramic and Belvedere from Olimp resort are the main targeted
for being privatized: “Seeing the poor condition of these three hotels,
I have once again realized that the State was the worst administrator. Everything
left into State administration is now in an extremely bad condition”, Silaghi
affirmed.
Accommodation charges at the seaside higher by 20 pc as against the previous month
The accommodation tariffs within the hotels from the Romanian seaside increased,
as of Friday, by 20 per cent compared to the previous month. An accommodation
place in a two-star hotel costs, on average, RON 100, and one within a three-star
tourist structure is RON 170, according to Mediafax. In 4 and 5 star hotels, the
accommodation prices start from RON 300 per person per night. The next raise is
expected on July 1.
The occupation degree during week-ends in terms of accommodation at the Romanian
seaside is 70 per cent, according to hotel owners estimations.
EUR 1.5 m for Romania promotion
Ministry for SMEs, Commerce and Tourism will organize in June tendering procedures
for selecting the companies to provide marketing campaigns for Romania internal
and external promotion.
The budget earmarked by the Ministry for these projects provides for EUR 1.5 M.
At the same time, at international level, the number of tourist offices abroad
is expected to increase, as of June, from 19 to 28, according to Lucia Murariu.
The offices will be opened in Austria, Germany, France, Spain, Italy, UK and China.
Source: Nine O'Clock
Halewood Romania sees 26% higher sales
Halewood Romania group, one of the leading wine producers on the local market,
has posted sales of over 2 million euros in the first three months of this year,
up 26% on the same time last year. "The sales increase was largely the result
of effective distribution, which was assisted by the restructuring of our sales
department, in a new approach to the market, as well as by our marketing operations,"
stated Delora Panga, the company's marketing manager. She specified that the results
were in line with the expected growth rate, and did not generate any significant
changes in the estimates for the year ahead.
Halewood is one of the biggest wine importers on the local market, with exports
accounting for 35% of the company's turnover in the first quarter of the year,
while in the long run they are expected to account for 60% of the turnover. "For
the end of this year, our objective is to double our market share and we intend
our red wines with appellation of origin to hold a 6% market share. In the wake
of this first quarter, we have met 30% of our objectives," specified Delora
Panga.
Source: ZF.ro
Romania expands mobile phone infrastructure
Property investors in Romania could have been handed a further boost with the
news that a major telecoms company has launched a new 3G broadband service that
promises to double transfer speeds.
With businesses increasingly relying on high-speed data technologies, Vodafone
has announced the creation of a new network that it claims will offer the fastest
network speeds on the market.
Vodafone Romania, which serves nearly 8 million clients, said that the new network
would double the data speeds available across 23 Romanian cities.
Liliana Solomon, president and chief executive officer of Vodafone Romania, explained:
"After pioneering 3G broadband - HSDPA services on the Romanian market, Vodafone
Romania is also the first company to provide the next performance level which
brings the fastest mobile data transfer speed in Romania."
The CIA's World Factbook claims that Romania's telecommunications infrastructure
is improving rapidly, especially in regard to wireless telephony - something that
could be of interest to investors in the area.
Source: ready2invest.com
The Right Move Abroad releases real estate market
property report
On 1 January 2007 Romania officially joined the EU as a result of acknowledged
structural reforms and progress undertaken in the last decade. Looking forward
to further achievements, the Romanian government presented its convergence report
with plans to enter ERM-II in 2012. To help integrate Romania further into the
EU there will be support from the planned EUR 31 billion structural and cohesion
fund. Particular focus will be oriented towards competition, energy, transport,
telecommunication, agriculture and consumer and health protection. Though there
are some concerns regarding the efficiency of using these funds, they do represent
an incentive for both local governments and the business sector to increase investments
further. The Commission will ensure that the funds are going to be properly managed
through financial corrections that may materialize in delayed disbursements, a
reduction of future payments or a recovery of funds.
Since 2000, Romania has ensured a significant macroeconomic stabilization with
a strong rebound of economic activity, reaching its peak in 2004. UniCredit CEE
Research currently projects real GDP growth of 6% for 2007 and expects it to stay
above 5% in the following years. Robust private consumption spending (despite
reducing its pace of expansion) and accelerating investments will continue to
be the main engine of growth in the country. According to the World Bank "Doing
Business 2007", conditions for investments improved significantly during
the last year with institutional progress made in the field of building permits,
labor regulation and trading across borders. The favorable business environment
is also assured by the low corporate tax (16%), improving infrastructure and relatively
high labor productivity adjusted for labor costs. Positive prospects are expected
in the medium term on the back of EU accession and sustained inflows of FDI, which
play a significant role in deepening industrial integration and influencing the
trade structure.
Positive 2006 growth on the back of EU membership
Romanian GDP increased in 2006 by a real 7.7 % yoy to reach EUR 97.2 bn. Last
year was characterized by persistently strong growth in private consumption, fuelled
by wage increases and credit expansion. While private consumption contributed
the most, with annualized growth of 12.6% (representing 79% of total GDP), the
fastest growth was registered in investments, which expanded by a real 16.1% yoy,
supported well by foreign capital inflows. A significant volume of investments
was directed towards infrastructure projects and the construction sector, posting
impressive 19% yoy growth. The strong domestic demand led to an increase in imports,
which resulted in a further deterioration of net exports. Nevertheless, the increasing
share of capital goods in total imports (30% yoy growth in 2006) provides an indication
of some improvements in the structure of the trade deficit.
Positive growth prospects fuelled by huge (re)construction activity
Short and medium-term prospects look bright and the current pace of expansion
is expected to continue, albeit somewhat more slowly due to the slightly more
subdued growth in consumption. Investment activity is expected to gain further
ground sustained by new large infrastructure projects and continued high FDI inflow.
Boosted by the mild winter, construction works went up by 28.3% yoy in the first
two months of this year. Such figures signal that 2007 may be a record year for
the construction sector, supported by high demand for both residential and nonresidential
buildings. The contribution of net exports is expected to deteriorate on the back
of cheaper and more easily accessible products imported from EU member countries.
Overall, full-year real GDP growth of 6% yoy should be achievable.
Euro adoption expected in 2014
The Romanian government presented its convergence report with plans to enter ERM-II
in 2012. Romania currently fulfills three out of the five Maastricht conditions,
with fiscal balance and public debt below the 3% and 60% thresholds and fluctuations
in the exchange rate remaining within the +/- 15% band. Nevertheless, further
efforts are needed in order to forge ahead with the disinflation process to help
achieve fast convergence in interest rates in order to meet all Maastricht criteria
as of Q4 2011 to be able to adopt the euro as of 1 January 2014. The medium-term
goals of the government also include improvements in the predictability of fiscal
policy, efficient use of EU funds, continuation and deepening of structural reforms,
sustainability of public finance in the long term, improvements in the investment
environment, harmonized regional development, work force flexibility and public
administration reform.
Focus on disinflation with an eye on FX market development
In the early months of 2007 headline inflation slowed further to 3.7% in March.
Lower food-prices, which account for more than 39% of the CPI basket and are quite
volatile, kept price growth low. Also cheaper imported products on the back of
the still strong appreciation in the RON and increased competition among retailers
have helped. The highest price increases were registered in the services sector,
reflecting some convergence towards the higher costs in the EU for medical, water
and wastewater services. Despite the lower than expected inflation figures, demand-side
inflationary pressure still seems to be present, as shown by the relatively high
administered price inflation in the past months. Price pressures are expected
to resume in the coming months on the back of fast wage growth, the still high
domestic demand and loose fiscal policy.
Additional price pressure is also expected mainly due to a higher base effect
induced by the decline in volatile food prices during Q3 last year. Further adjustments
in administrative prices are also expected to exert a strong inflationary impact.
Romania is gradually lifting energy prices as it has pledged to align tariffs
for domestic gas prices to the EU level by 2009.
First signals of a looser fiscal policy
The 2007 budget targets a public deficit of 2.8% of GDP. Most of the increase
in government spending is needed to support infrastructure investment expenditure.
Revenues are projected to increase up to 35.2% of GDP, mainly as a result of the
increase in transfers from the EU, as well as from corporate and personal income
taxes and the stepped-up enforcement of VAT that is anticipated. The boost in
revenues is needed in order to offset the 2% decrease in the social security contribution
rate. February figures already showed a 0.5% deficit after the 0.6% surplus realized
in January. The budget balance of the first two months posted a surplus of only
0.1% of expected GDP. This in combination with the upside revision of the planned
state securities issue are giving clear signs of a more expansionary fiscal policy,
supporting a forecast for a full-year deficit of 2.3%.
Despite good FDI coverage, the deteriorating current account remains an issue
to monitor.
The current account closed 2006 with a deficit of EUR 9.97 billion, or 10.3% of
GDP. The trade deficit widened to EUR 14.9 billion. Current transfers, incl. wage
remittances from Romanians working abroad and EU funds, covered about 40% of the
trade gap. Imports surged by 25% yoy in 2006 sustained by imports of capital goods
(machinery and equipment, up by 29.5% yoy) and transport equipment (up by 41.5
% yoy). The main export drivers were also machinery and equipments, which increased
by 33% yoy last year and became the main items in total exports with a share of
20% (outpacing textile products whose share dropped to 16%). The most dynamic
sub-sector in terms of exports was transport equipment (mainly in connection with
the automotive sector) with an average growth rate of 44% for the whole year.
Source: newswiretoday.com
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