Growing uncertainty threatens Romanian economy

Bucharest, Romania (Anders Sandberg, CC BY-NC)

3.5 million Czechs will spend holidays abroad

In Latvia 44,574 entities registered as micro enterprises

Romania

Political turmoil in Romania could put the country’s recent economic gains in jeopardy, claims Rxana Voicu-Dorobantu from the Bucharest University of Economic Studies. She wrote in the Balkan Insight that consequences of quarrels within the ruling party and of the impeachment of the cabinet of Sorin Grindeanu could have negative long-term effects on public finances, FDI, business environment and the output of agriculture.

Voicu-Dorobantu mentions new government’s plan to eliminate the second pillar of the pensions system, as well as to impose a revenue and a solidarity tax for high net-worth individuals.

„The increase of the minimum wage, pensions and the unified wage law are more or less inevitable, but the conditions in which they will be enforced remain blurry. The unified wage law, applicable to the public administration, as well as other measures proposed, will inevitably increase government expenditure. (…) The solidarity tax, only mentioned verbally in the new Program, is one of the elements that has caused most uproar, mainly because the details are unclear about who pays it, when, how it is to be collected, and who benefits,” she writes and also underlines that there is little input from the European funds in the agriculture sector, due to poor absorption infrastructure. „Romania may now be on the brink of a perfect storm,” she sums up.

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Czech Republic

Radio Praha reports that this year Czechs are planning to spend holiday abroad. The data from the Association of Czech Travel Agencies show that 850,000 will go to the seaside resorts in Croatia, 650,000 will visit Slovakia and 570,000 will spend their holidays in Italy. Also other destinations, like Egypt, Tunis, Greece and the United Arab Emirates, are becoming more popular.

As Radio Praha comments: “Czechs (…) adopted the west European fashion of going on shorter holidays several times a year rather than having one long holiday in the summer. The average length of holidays booked is now one week”.

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Latvia

The Baltic Course informs there were 44,574 companies registered as payers of micro enterprise tax in July 2017. Micro enterprises’ tax rate is 15 per cent.

As the Latvian State Revenue Service (VID) reports, since 2010, when the micro enterprise tax rate was introduced, Latvian authorities received a total of 88,464 applications. Latvian government plans to introduce a new tax law for small companies.

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What’s up in indexes

BET (of Bucharest) increased from 7,855.36 index points Friday, June 30th to 7,856.03 index points Monday, July 3rd. It’s up 0.01 per cent d/d and up 21.26 per cent y/y.

BUX (of Budapest) decreased from 35,205.42 index points Friday, June 30th to 34,780.08 index points Monday, July 3rd. It’s down 1.21 per cent d/d and up 32.41 per cent y/y.

CROBEX (of Zagreb) increased from 1,865.57 index points Friday, June 30th to 1,868.85 index points Monday, July 3rd. It’s up 0.18 per cent d/d and up 14.05 per cent y/y.

OMXR (of Riga) increased from 970.21 index points Friday, June 30th to 972.17 index points Monday, July 3rd. It’s up 0.20 per cent d/d and up 52.99 per cent y/y.

OMXT (of Tallinn) increased from 1,137.08 index points Friday, June 30th to 1,143.34 index points Monday, July 3rd. It’s up 0.55 per cent d/d and up 16.45 per cent y/y.

OMXV (of Vilnius) increased from 597.07 index points Friday, June 30th to 598.84 index points Monday, July 3rd. It’s up 0.30 per cent d/d and up 17.14 per cent y/y.

PX (of Prague) increased from 980.41 index points Friday, June 30th to 981.27 index points Monday, July 3rd. It’s up 0.09 per cent d/d and up 18.76 per cent y/y.

SAX (of Bratislava) decreased from 328.84 index points Friday, June 30th to 327.25 index points Monday, July 3rd. It’s down 0.48 per cent d/d and up 4.64 per cent y/y.

SOFIX (of Sofia) increased from 703.46 index points Friday, June 30th to 705.16 index points Monday, July 3rd. It’s up 0.24 per cent d/d and up 56.48 per cent y/y.

UX (of Kyiv) decreased from 1,047.78 index points Tuesday, June 27th to 1,039.69 index points Monday, July 3rd. It’s down 0.77 per cent d/d and up 42.26 per cent y/y.

WIG20 (of Warsaw) increased from 2,299.80 index points Friday, June 30th to 2,323.74 index points Monday, July 3rd. It’s up 1.04 per cent d/d and up 34.75 per cent y/y.

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