Ukraine’s food sector growing hungry

The  European Bank for Reconstruction and Development (EBRD) passed a negative economic growth outlook for kraine for both 2012 and 2013 citing faster decline in industrial production in the last two quarter of 2012. In its latest Regional Economic Prospects Report published in January, the EBRD said it expects Ukraine’s economy to post a zero growth in 2012 and expand by 1% in 2013, cutting its forecasts from earlier expected growth of 1% and 2.5%, respectively. Ukraine’s industrial production in 2012 contracted by 1.8% from 2011 with the annual fall in December deepening to 7.6% from 3.7% in November, according to data from the State Statistics Service. Agricultural production is no exception, declining by 4.5% y/y in 2012 versus a 19.9% growth in 2011. Crop production last year fell by an annual 8.2%, with commercial farms’ production going down by 10.9% and that of private farms decreasing by 4.6%, – animal goods’ production, on the other hand increased by 3.8%. Specifically, output of commercial farms was higher by 7.6% and of private farms by 1.2%. According to
preliminary data, the strongest annual output growth was registered in Khmelnytsky (+12.9%), Ternopil (+9.8%) and Kyiv (+9%) regions, while the steepest decline was reported in the regions of Dnipropetrovsk (-20.3%),
Zaporizhzhia (-19.2%) and Odesa (-19.1%).

Much more in the Intellinews report: Ukraine Food Sector Report

 

Rise in Romania’s public debt eases as fiscal consolidation advances.

Romania’s public debt edged up a modest 0.1pps ytd to 34.8% of GDP [ESA methodology] at the end of October 2012 – after it nearly tripled since the end of 2008. The domestic public debt expanded sharply by more than three times while the external public debt advanced at a slower pace yet still more than doubling. Notably however, a large part of the domestic debt is denominated in foreign currency – actually more than half of it [54.8% at the end of October].

Romania public debt

Much more in the EMD report: Romania Country Report

 

Deleveraging continues in Romania

Foreign banks’ exposure against Romanian banking system down 11% y/y at mid-2012, XR effects filtered out.

The exposure* to Romanian banks of BIS-reporting Western banks, assets alone, decreased sharply by 4.1% q/q in Q2 of 2012, according to our calculations based on BIS data. Q3 data will be released in January 2013. Q2 marked the fifth consecutive quarter of decrease in this regard and the sense of flow for the foreign banks’ resources is unlikely to change any soon. Phasing out foreign currency lending from among the banks’ range of products goes hand in hand with the consolidation of deposit base as the main source of financing for local branches.

* exchange rate adjusted

Assets and liabilities of BIS banks versus Romania [banking and non-banking sector]

These are only a few of the insights in the new Intellinews Report : Romania Financial Sector. Learn more and purchase now>>

 

Romania’s central bank admits inflation slips outside target band by end-2013

Romania’s central bank has raised the year-end inflation projections by 1.9pps to 5.1% y/y for 2012 and by 0.5pps to 3.5% y/y for 2013, according to its Quarterly Inflation Report released on Nov 7. The IMF expert team visiting Romania expressed concerns with the price stability.

Consumer price inflation eased to 5% y/y in October after peaking to 5.3% y/y in September, the statistics office reported. CORE2 inflation was 3.2% y/y in September. The average consumer prices in the 12 months ending October were 3.1% up y/y, accelerating from 3% y/y growth registered last month.

 

 

 

 

PLUS:
FOCUS STORY: Are there grounds for euroscepticism in Romania?

This is only a small extract of the insights in the new Intellinews : Romania Country Report; read more and purchase now>>

 

Short-lived growth for construction materials industry in Romania

Building materials market projected constructive performance between Jan-Aug 2012, in line with the positive development of construction sector over the period.

Construction materials production increased by 5.9% y/y in Jan-Aug and remained positive, except for February when construction activity was stalled by adverse weather conditions for several weeks.

Imports of building materials declined marginally by 1.1% y/y EUR 430.2mn in Jan-Jul 2012. However, the cement and lime segments recorded positive performance propped by infrastructure works.

Nonetheless, the expected deterioration of construction sector’s performance in H2/2012 will likely impact the building materials segment.

Non-metallic mineral products output in 2007-2012 (monthly indices, 2005=100, unadjusted series)

Non-metallic mineral products imports in 2009-2012 (monthly, EUR mn)

Much more in the Intellinews report: Romania Construction Materials Sector

 

Romanians consuming more food now than previous year?

The revenue for food and beverage companies selected from our pool of main players [over RON 1mn in revenues] increased by over 12% on the year to RON 38.5bn [over EUR 9bn] in 2011.

The growth rate was similar in euros. Food prices increased by 6% y/y nominally on average – effectively real sales actually increased by approximately 6% on the year in 2011.

Overall net profit margin improved slightly to 1.3% in 2011 from 1.1% in 2010 – but there are wide discrepancies among separate market segments.

Generally, the profitability in beverages lags behind that in the food area.

Structure of the food and beverages market, by segment

This is only a small extract of the insights in the Intellinews Romania Agri-Food Sector report; read more and purchase>>

 

New pharmaceutical legislation causes ill effect in Poland

The Polish pharmaceutical market value (in gross retail prices) rose by 3.7% y/y to around PLN 22.3bn (EUR 5.4bn) in 2011. However, medicine sales declined this year due to the new controversial reimbursement act enforced in January.

According to market data, pharmaceutical sales dropped by approximately 4% y/y between Jan-Sep 2012. The decline was noticeable both on the retail level and also in medicine output. Calculations based on official statistics shows that the pharmaceuticals sold production volume dropped by 9% y/y in Jan-Sep 2012. The pharmaceutical production index also slowed down visibly in Q1 and Q2 this year.

While legislation changes are presumed to drive the pharmaceutical market lower this year, the segment of prescription-based subsidized drugs, the OTC sector, is expected to continue growing.

Pharmaceutical market value in retail prices in 2011-2012

These are only a few of the insights in the new Intellinews Report : Polish Pharmaceutical Sector. Learn more and purchase now>>

 

Romania’s economy wears weary outlook

Romania’s economy increased by 0.7% y/y in H1 and will end with  negative for the year, less than -1%.  Bullish expectations were ruined by  poor use of EU funds and by  below-average agricultural production. The IMF and the government expect a much stronger advance in 2012 of 2.5%, according to the Fund’s World Economic Outlook. But even this will not help the country return to  pre-crisis 2008 GDP levels.

Romania’s statistics office revised the estimate for the country’s Q2 GDP to 1.1% y/y, down from 1.2% y/y previously announced on September 6, according to the newly introduced T+95 estimate. The adjustment is minor and does not send positive signals for the country’s economic growth,  already expected to slow  in H2.

These are only a few of the insights in the new IntelliNews : Romania Country Report. Learn more and purchase now>>

 

Romania’s GDP mirage: fact or fiction?

Romania’s seasonally-adjusted GDP edged up by 0.5% q/q in Q2, after it has stagnated for three years around the same level. Against the past quarter, the domestic demand strengthened robustly driven by both consumption (1.6% up q/q) and gross fix capital formation (gfcf, 4.4% up q/q). On the opposite, the external demand weakened visibly by 1.4% q/q. The imports edged up by 1.2% q/q contributing, besides the export’s weakening, to the deterioration of the external balance.

GDP and main elements by utilisation, quarterly, seasonally adjusted [2000=100]

These are only a few of the insights in the new IntelliNews : Romania Country Report. Learn more and purchase now>>

 

Unofficial data leaked from central bank paints bleak picture of Romanian banking system

Romanian banks incurred aggregated losses of RON 325mn (EUR 73mn at eop XR) in Q2, 2012, according to our calculations based on central bank data. Out of 41 banks, 23 reported profits and 18 losses, according to unofficial data leaked from the central bank. The banking system thus dipped back into the red after it posted aggregated RON 125mn (EUR 29mn, @ eop XR) profit in Q1.

Big picture: dividends vs. interest incomes derived by BIS-reporting banks in Romania [and elsewhere in region].

Nonetheless, this picture has to be put in the context of foreign financial groups. The foreign banks derive two types of benefits from their Romanian subsidiaries: firstly via dividends [probably the smallest portion of the benefits these days, most of the time re-invested when they were higher in the past] and secondly via the interest for the money lent at an interest rate that is driven by the country’s sovereign rating – meaning at high interest rates. The ROA for the foreign financial groups have thus nothing to do with the ROA reported by their local subsidiaries [assuming they finance their own subsidiaries, which is mostly the case].

Much more in the Emerging Markets Direct report: Romania Financial Sector