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News of the autumn...

The summer just passed by, and we all prepare to enter in the autumn.

Autumn always inspires me a few words: plenty, wisdom, fulfillment… Still autumn means the beginning of the school, electoral campaigns, but also the main trends in the economy, those who we will give guidance for the upcoming year.

Therefore, let’s go to review what happened in the end of this summer, but also the main trends revealed by the beginning of the autumn.

Good news comes from the Ministry of Economy, who announce a record of the transitional period, namely: "Romania's economy grew by 8.6% in the first half of 2008, while the advance of the gross domestic product in the second quarter of the year was almost 9%”.

Another novelty refers to the reduction of the parafiscal taxes. The number of those has dropped from 278 to 115 at present, after the exclusion of some taxes related to both, the public and private domain. Nevertheless, we still belong to the countries with an excessive parafiscalty, so hopefully this autumn the reduction of these taxes will continue.

The Ministry of Finance comes also with some news; positive for contributors this time. Starting with august 2008 the taxes and tariffs charged by state institutions can be consulted on the website of the Ministry of Finance. Thus, the Ministry of Finance has identified 115 duties, taxes and tariffs which are registered in the Fiscal Register accessible on the website of the Ministry. Unfortunately, the Ministry has managed until now to centralize only the central government taxes. Local Taxes are not included in the list, register falling still in phase of the project.

Not such good news, although no longer a novelty for anyone, is the ingravescence of the crisis staff in the labour market, namely the Government's inability to respond effectively to this crisis. Only within the National Agency for Placement of the Labour Force were registered at the end of august over 20,262 unoccupied jobs, most of them in Bucharest, Dolj and Hunedoara. Companies are seeking both for staff and workers, especially in the fields of construction, textile industry or assembly.

In reality, the crisis is more acute than the data revealed by the National Agency for Placement of the Labour Force, the lack of personnel in some cities or industries is now, in my view, the main obstacle to future economic development. We continue to hope therefore that this autumn the Ministry of Labour and Social Protection will introduce some absolutely necessary regulations in order to liberalise the labour market respectively a simplification of bureaucracy relating to obtaining work permits for Romania.

And this is all happening while Romania occupies the second position in the European Union regarding the increase rhythm of the average income of the citizens. According to a report of the European Industrial Relations Observatory, average incomes have increased in Romania with 18.4% in 2006, and 25.5% in 2007, positioning Romania immediately after Latvia, which occupies the first position with a grow percentage of 32.3%.

Neither the news about inflationA persistent increase in the level of consumer prices or a persistent decline in the purchasing power of money, caused by an increase in available currency and credit beyond the proportion of available goods and services is the best. The annual inflation rate targeted by the National Bank was accentuated in July this year to a peak of the last three years, 9.04%. This led to the amendment of the Central Bank prognosis regarding inflation at 6.6%, compared to the originally level proposed by 3.8%.

Nevertheless, foreign investments in Romania have continued to rise in the first half of this year. The increase was 63.4% compared to same period of 2007, up to 4845 billion euros value, that covers in the proportion of 61% the deficit of the payments balance of Romania. The increase is even more important, considering that in 2007 the foreign direct investmentDirect investments in productive assets by a company incorporated in a foreign country, as opposed to investments in shares of local companies by foreign entities. An important feature of an increasingly globalized economic system. decreased by 22.3% compared to 2006.

Even to the often amended Fiscal Code a new change is prepared for this autumn. This time we speak about a positive change for both employees and employers. The Ministry of Economy and Finance intends to amend the Fiscal Code by increasing the deductibility limit for the facultative pension funds (pillar III), the most probable option being the duplication of those. The level of deductibility for voluntary contributions to pensions could increase by at least 400 euros at the beginning of next year, the current level being obsolescent already for a long time now.

The decline on the world construction market easily affects Romania as well during this period. The rhythm of growth in construction slowed this summer by about 5%, according to estimates based on the number of building permits issued by local authorities within the last months. During the autumn we expect this to decline to slightly increase.

Look that we have an autumn full of news and also challenges! Good news, less good news, ultimately what matters more is the way we will manage to fructify them or even to turn them into a competitive advantage. But certainly neither this autumn we will have much monotony... It means we will perfectly match with the colours of the autumn...

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