Net earnings see 12.7 pct hike in February y-o-y

Net earnings climbed 12.7 percent in February 2016 y-o-y and 0.4 percent over the previous month, to RON 1,950, according to data from the National Institute for Statistics.

“This should keep domestic demand strong, increasing deteriorating pressures on the trade balance, and underlying inflation ex-tax cuts elevated. In the context of weak external demand, the wage hike of 8.7 percent YoY in the manufacturing sector, mainly as a result of government decisions (minimum wage hike), is eroding the competitiveness. Another 19 percent minimum wage increase has been announced for May. Consequently, we see a wider trade gap from both accelerating imports and weaker exports. Excluding the EU funds (which only occasionally add to supply in the FX market), the RON’s external position could turn negative this year,” stated Ciprian Dascalu, chief economist with ING Romania in a report today.

As compared to January, net earnings increased most in manufacture of tobacco products (32.3 percent) and in activities auxiliary to financial services and insurance activities (11.4 percent), while smaller advances (between 2.5 percent and 4.5 percent) were seen in telecommunications, manufacture of motor vehicles, insurance, reinsurance and pension funding and some manufacture areas.

Decreases were seen in warehousing and support activities for transportation (10.7 percent), in extraction of crude petroleum and natural gas and manufacture of basic chemicals (between 4.5 percent and 6.5 percent) and in financial service activities, mining, electricity, gas, steam and air conditioning supply, real estate activities and manufacture of other non-metallic mineral products (between 2.5 percent and 4 percent).

Natalia Martian