Macroeconomy and taxation
* Impact on Romania’s economy of the global trade war and the new military conflict in the Middle East.
* Economy will grow at a rate of 3% to 4% in 2020 but depends on the trend of industrial output in Germany and the euro zone.
*Foreign debt will continue increase to finance the trade and current account deficits.
* A big question is whether new taxes will be introduced or the VAT, the excise duties and property taxes will be raised or not.
* The digitalization of the tax authority ANAF will be the only solution to boost tax collection in an election year.
Infrastructure
* Traffic on the Bacau Beltway will be opened about one year from the start of the work in the area, a first for the local infrastructure.
* National Company for Road Infrastructure Administration (CNAIR) will start construction on its own on the problem-sections, where no progress has been made due to builders who are behind schedule.
* Romania will have a second highway border checkpoint at Bors, once work on both sides of the Hungarian border has been completed.
* Step-up of plans for A8 Targu Mures – Iasi highway.
* New investment in upgrading the existing infrastructure such as construction of beltways to route traffic around cities.
Banking
* Lending could increase at the same rate in 2020 as in 2019 or even slow down, while the central bank may decide to keep the key rate at 2.5%.
* The tax on bank assets, initially called ‘greed tax’ should disappear in 2020.
* Consolidation and restructuring of the banking system could continue and Bank of China, the fourth largest bank in the world, will begin operations in Romania.
* The banking system will stay in the black in 2020 but may see less profit than in 2019.
* Banking system regulations.
Insurance
* New changes of the auto liability insurance (RCA) legislation. Reference rates set by the Financial Supervisory Authority dropped.
* Most insurers will pursue digital development.
* Auto insurance will account for a lower share of the market.
* Profitability and capital of insurers will remain under pressure.
* Bubbliness on the health insurance market may continue.
Stock markets
* The regional investment funds (SIF) could come out of the shadow of the last few years, following drop of the 5% stake cap.
* Banca Transilvania could overtake Romgaz by market value and become the second largest issuer on the Bucharest Stock Exchange.
* The Bucharest Stock Exchange could have an IT company on the main market, i.e. Bittnet Systems, the leader of the IT training market in Romania.
* The main index, BET, could reach more than 10,000 points for the first time since 2007.
* Loans on the stock market could continue in 2020, after no fewer than 17 such debt instruments were listed on the Bucharest Stock Exchange in 2019.
Real estate
* The local real estate market will deliver more than 67,000 to 70,000 new homes in 2020.
* New areas in Bucharest and the rest of the country will attract office space projects. The new cities include Craiova, Sibiu and Constanta and the new areas in Bucharest include Theodor Pallady and Obor, while Berceni is getting ready.
* Record deals of 2019 will attract new investors on the local market.
* Sales and prices of the old homes in Bucharest will be negatively affected by the problems of the centralized heating system.
* Greater demand for apartment rentals near office building areas will lead to the first residential projects designed with rental instead of sale in mind.
Agriculture
* Norofert, manufacturer of ecological organic fertilizers and Holde Agri Invest, an entrepreneurial company operating farmland, will be listed on the Bucharest Stock Exchange.
* Agricultural producers invest in processing, state-of-the-art equipment and high precision machinery.
* The new bet of agricultural investors is livestock farming, more precisely cattle farms.
* Number of vegetable farmers will increase after the Agriculture Ministry announced it would subsidize 10% of the invoice of all the vegetables delivered for sale.
* Number of organic farmers will go beyond 10,000 this year.
Food industry
* Deals on the food and beverage market will continue. Water bottler La Fantana is for sale and the deal could be finalized this year.
* Consumption will continue to slow down.
* Fewer and fewer people will want to work in plants.
* Swine pest will continue to affect the meat industry after the market lost almost EUR2 billion in the second half of 2017.
* Consumption of organic foods will increase in 2020 again, so more and more producers will bet on such products.
Construction
* Dedeman, the DIY retailer held by brothers Dragos and Adrian Paval, reaches EUR2 billion sales.
* Private companies are the biggest investors in the construction sector.
* Two-room apartments remain the in highest demand.
* DIY actors make new moves, after several networks announced in 2019 they would concentrate on online (Leroy Merlin), expand with physical stores (Hornbach) and change the way their business is organized (Ambient).
* Construction materials manufacturers will invest in production.
Labor market
* Labor shortage will worsen. It stood at 308,000 people at the beginning of 2019, according to a survey by audit and advisory firm KPMG.
* Unemployment rate will drop to less than 3.5%.
* Number of foreign citizens coming to work in Romania will increase. Most of them come from Vietnam, as well as from the Republic of Moldova, Sri Lanka, Nepal and India.
* The number of people not included in the labor market or in the education and professional training systems will go up.
* Dual education will grow.
Travel
* The UEFA European Football Championship, with four games in Romania, will lead to an increase in the number of incoming tourists.
* International hotel chains will affiliate new hotels.
* Romanians’ spending on holidays abroad will increase.
* Low-cost airlines will boost market share.
* Tarom will continue to struggle with losses without a clear strategy.
Auto industry
* Ford Romania is headed towards 300,000 cars assembled a year in 2020, with the start of production of the new Puma SUV in Craiova along with Ecosport. Production of the Craiova plant will therefore double in 2020, and Ford will narrow the gap to Automobile Dacia’s production.
* Automobile Dacia is getting ready to expand production capacity to more than 400,000 units a year from the current 350,000, the highest growth in the past ten years.
* The auto industry could be affected by the slowdown of the German industry.
* The oxygen road stamp in Bucharest will encourage buying less polluting cars over old ones.
* Green – electric and hybrid cars, will go beyond 5% market share.
Retail
* German discount store chain Lidl will see sales of EUR2 billion and can challenge Kaufland for the top spot.
* The ten modern retail chains will open 500 stores for a new high.
* No more stores of over 5,000 square meters will open in Romania.
* Modern retail market share will increase to 70%.
* Foreign retailers will continue to develop new store formats, new side businesses – restaurants, drugstores, and new brands.
Mergers and acquisitions
* Romanian SMEs are the new ground to conquer for investment funds.
* Romania will see a new EUR1 billion deal, the first after 2008, with the sale of either Enel or CEZ or of both, as their Romanian operations are now for sale.
* The real estate market will generate most of the over EUR100 million deals.
* Mid Europa will sell private medical service provider Regina Maria and will start testing the waters for the exit from Profi, a deal some experts put at about EUR1 billion.
* One or more large Romanian entrepreneurial business will enter the radar of foreign strategic or financial investors.
Transports and logistics
* Logistics and industrial space will head towards 5 million square meters in 2020.
* Air traffic is expected to see growth stabilizing at 10% to 20 million or 22 million passengers.
* There may be new deals in the logistics and transports sector, as Dedeman has already made investments in logistics centers in 2019 and P3 continues expansion.
* CFR will experience more and more problems due to the lack of upgrades of the railroad infrastructure and rolling stock.
* A new airport in Brasov could end the isolation of an important center of Romania.
Energy
* 2020 could see the sale of CEZ completed, as well as of Enel’s. What signal does this send? Who could replace them?
* Investment appetite will be greater than in the past years, but far from what is really necessary.
* Competition over customers will be fiercer with the expected deregulation of the electricity and natural gas markets.
* Digitalization of the sector, including networks and smart metering.
* The sector’s move away from carbon, amid international efforts to fight climate change.
Health
* Private actors in the private medical services sector, a 7 billion lei market a year, will continue to increase revenue and announce new acquisitions.
* Catena, the largest pharmaceutical retailer, a business held by entrepreneur Anca Vlad, is headed towards 1,000 pharmacies.
* Consolidation in pharmaceutical retail will continue, and the appetite for new acquisitions is high among top actors.
* Pharmaceutical wholesale will remain a consolidated market, without too many changes.
* Drug producers will continue to increase their OTC portfolios.
Telecom
* What targets will the ANCOM and government choose for the 5G auction: high licensing fees or wide network coverage?
* Will Huawei be excluded from communications networks in Romania?
* Deutsche Telekom and OTE will decide whom to sell Telekom Romania.
* Vodafone will truly get into the fixed-mobile offers game.
* Consumption of Internet services and the price for video content will shape the market.
IT
* IT startup ecosystem continues to develop, and the unicorn rush continues.
* Will the government finally have a consistent computerization policy? Renewed hopes for the idea of creating a digitalization authority.
* Companies will put greater emphasis on cybersecurity solutions.
* Software robots and automation in the business sector will continue at a fast pace.
* Will stagnation for Romanian IT companies continue?
International
* Escalation of all sorts of conflicts throughout the world: trade, military, water, pension, against inequality.
* In an increasingly unstable world, demand for reserve assets such as gold, the Swiss franc or even properties in safe countries like Switzerland will rise.
* Despite increased risks, people will continue to travel even more, and the global air transport will see at least 5% growth.
* China will try to become an even more important geopolitical actor in the world, to match its economic power, but the US with its military power will offset it. Russia will be an arbiter and Germany will remain silent on the geopolitical stage, though not economically.
* Much harsher steps than before will be taken to reduce pollution and speed up towards a world of non-polluting energy.
(English version by Loredana Fratila-Cristescu)