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Market network to 400 units by 2025, and French Auchan, which will open 15 convenience stores at OMV Petrom filling stations in 2017.
The expansion is by no means limited to food retailers. Elsewhere in the sector, DIY chain Dedeman became the first company controlled 100% by Roma- nian entrepreneurs to exceed €1bn in turnover in 2016, and it is planning to open several new stores this year. Altex, Romania’s largest electronics, IT and home appliances retailer, has announced ambitious hiring plans for this year. And Enterprise Investors plans to double
the size of its toy retailer Noriel’s store network in the coming years.
While e-retail still lags behind West- ern Europe, Romanians are increas- ingly going online to make purchases.
tional outsourcing and shared services firms, and the strength of the IT sector has helped spawn a growing number of local startups.
The healthy expansion of the retail and IT sectors has helped bring down unemployment to its lowest level since the start of the international economic crisis. Confidence in the local economy is reflected in the strong hiring inten- tions of firms in Romania, of which almost one in three plan to add to their payrolls in April-June, according to ManpowerGroup’s latest Employment Outlook Survey. For the first time, the survey showed positive hiring perspec- tives across all regions and sectors.
However, while the economy continues to grow, there are worries that the com- bination of spending and tax cuts –
“The IT market is today really driving real estate, as one of the major drivers of the economy”
Research from local financial informa- tion firm KeysFin showed in December that e-commerce turnover tripled between 2010 and 2015. The trend appears to have continued in 2016.
On Black Friday 2016, Romania’s biggest online retailer eMag made 1.1mn transactions worth a total of RON300mn.
This in turn has driven demand for logistics space from both traditional and online retailers, says real estate consultancy JLL. "The industrial market continues to be very dynamic in terms of new supply and demand. The expan- sion of the retail companies and the strong increasing consumption are the main drivers of the sector,” the firm said on April 10.
Alongside retail, “the IT market is today really driving real estate, as one of the major drivers of the economy,” David Hay, head of AFI Europe Romania, told the SEE Property Forum 2017 in Bucha- rest on March 29. Romania is now well established as a destination for interna-
as outlined in the ruling Social Demo- cratic Party (PSD) manifesto ahead of the 2016 general election – will have a damaging effect on fiscal stability.
Specifically, if the government fulfils all its election promises, these are expected to push the budget deficit above 3% of GDP, thereby putting the country into the EU’s excessive deficit procedure. The IMF forecasts a budget deficit of 3.7%
of GDP this year, widening to 3.9% in 2018. Hiking public sector pay is likely to be offset by a continuing low level of public investment, with a damaging impact on longer-term growth.
Meanwhile, Moody’s lowered its out- look on Romania’s Baa3 issuer rating from positive to stable on April 21, citing the country’s expansionary fiscal policy and failure to take advantage of the “favourable macroeconomic and financial market conditions to bring its public debt onto a clear downward tra- jectory and to restore the fiscal buffers it lost in the aftermath of the crisis”.
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