Economic sentiment among Romanian managers is at its highest level of the past two years, even though 76% of them believe they will be seriously affected by the war in Ukraine and 40% expect the GDP to decrease, according to a Confidex survey conducted by Impetum Group. Agriculture and industry are the sectors where economic sentiment among managers has decreased, but the index remains higher than at the beginning of the pandemic. The CONFIDEX index reached a record high of 47.8 points, following a decline recorded in the second half of 2021. The increase is a general one, but it is higher in the transports (+9.7 points) and services (+7.6) sectors and rather moderate in the other sectors (from +5.4, to +5.9) due to the emergence of new crises and the impact of the war in Ukraine.
Romania recorded the biggest economic growth in the European Union in the first three months of this year, with an advance of 5.2% compared to the previous quarter, a preliminary estimate published by Eurostat shows, according to Economedia. The European Union’s Gross Domestic Product grew by 0.4% in the first three months of 2022 compared to the previous quarter, while in the euro area, GDP was up 0.3% in Q1/2022 quarter-on-quarter. In the same period, the US Gross Domestic Product decreased by 0.4%. Romania also had one of the highest year-on-year economic growth rates in the EU, of 6.5%, in the first quarter of 2022, according to data published by the European Union’s statistical office on Tuesday.
Romania recorded 6.5% economic growth in Q1/2022 year-on-year, and GDP grew by 5.2% in the first three months of the year compared to the last quarter of 2021, the National Institute of Statistics (INS) announced on Tuesday. The annual growth rate in Q1/2022 was higher than the one recorded in Q4/2021, when economy had grown by 2.4%. In 2021, GDP had increased by 5.9%. The quarterly growth pace also accelerated at the beginning of 2022, after an only 1% advance in Q4 of 2021 compared to Q3 of 2021.
Romania experienced a technical recession in the first half of 2020, and based on available data, economic growth in 2022 could be around 5% compared to 2021, according to an Erste Group Research report signed by Ciprian Dascălu, BCR’s chief economist. Moreover, Andrei Rădulescu, Macroeconomic Analysis Director at Banca Transilvania, indicates in a report by the bank that statistics show an improvement in the climate in Romanian economy in the first quarter of this year, thanks to the resilience to the overlapping supply-side shocks and the events in Ukraine and their consequences.
The number of companies and households in the euro area unable to make repayments on their bank loans is set to rise, and loan losses will increase to a five-year high of 3.9% in 2023, although they will remain lower than the previous peak of 8.4% recorded in 2013 during the euro area debt crisis, according to an analysis made by EY. The rise in non-performing loans will occur amid the slowing lending growth, which is set to decelerate to 2.9% in 2023 as post-pandemic demand for lending is suppressed by the rising inflation and the financial impact of the war in Ukraine.
Austrian insurer Vienna Insurance Group (VIG), present on the local market through three insurance companies, namely Omniasig, Asirom and BCR Asigurări de Viață, ended the first three months of 2022 with EUR 3.45 billion underwritten premiums, up by 11.2% year-on-year, while its gross profit reached EUR 124 million, according to the information transmitted by VIG representatives. VIG recorded a EUR 891 million volume of gross underwritten premiums in the Central and Eastern European region, which Romania is part of, in Q1/2022, nearly 20% higher than the result reported for the similar period of last year.
Romania is to withdraw from the International Investment Bank (IIB) and the International Bank for Economic Cooperation (IBEC), two development banks linked to Russia, amid the sanctions imposed by the EU and other countries against Russia, according to two draft laws initiated by the Ministry of Finance. The Ministry of Finance notes the risk of insolvency for both credit institutions, due to the withdrawal of several member states and downgrading of ratings, and cannot assess a financial impact in terms of Romania’s exposure and the activities of the two banks. IIB needed EUR 125 million in March and asked member states to make payments to avoid default. IIB borrowed significant amounts in RON from the Romanian market, including through a bonds issue listed on Bucharest Stock Exchange. Moreover, IIB also provided significant financing to companies in Romania.
Baia Mare City Hall has started an approximately EUR 1.5 million investment for the installation of 46 more charging stations for electric cars in various parts of the city. The new stations will be located in places that are easily accessible to the public and arranged in such a way as to ensure the widest possible coverage, both in residential and commercial areas, as well as to ensure travel needs in inter-urban transit areas, according to a press release issued by Baia Mare City Hall.
This month, Cluj County Council is to launch the tender for the construction of the future integrated transplant center, a EUR 200 million investment financed through the National Recovery and Resilience Plan (PNRR). The investment involves building an integrated transplant center with a capacity of 280 beds, which would integrate the necessary facilities for four types of transplant: heart, lung, liver and kidney. The center will have 12 operating and surgery rooms, Imaging and Emergency areas, laboratories, transfusion and blood collection unit, Intensive Care area, medical offices and research rooms, wards, a heliport, etc.
Businessman Ion Țiriac is preparing to submit the necessary authorization documents for two residential complexes, with several hundred apartments each, in Brașov and Timișoara, on lands where he had planned to build shopping centers before the 2008 real estate crisis. The next wave of investments will also include a project to be developed on the premises of the former IFMA elevators plant in Bucharest, where a 50-storey tower could be built.
The Government is to discuss, during today’s meeting, the draft law exempting the RON 200/month representing income from salaries and associated to salaries from the payment of taxes and social security contributions, for the voluntary increase in the guaranteed gross minimum wage in economy, stipulated in the individual employment contract. Iulian Ardeleanu, Director General, Directorate General for Tax Legislation and Customs and Accounting Regulations within the Ministry of Finance, has stated that this RON 200 increase without taxes and contributions is a temporary measure, for a period of six months, which aims, somehow, to support categories that are paid with the minimum wage.
On Tuesday, the Offshore Law received a favorable report in the Chamber of Deputies’ reunited Industry and Budget-Finance Committees and will now be put up for final vote in the plenary session. Save Romania Union (USR) and the Alliance for Romanians’ Unity (AUR) presented their amendments, but they were not voted by the deputies. USR proposed that the profits from gas extraction in the Black Sea should go to Pension Pillar 2. All parties voted in favor of the Offshore Law, and there were 4 votes against it, from AUR representatives, who proposed introducing sanctions for those exploiting gas from the Black Sea.
Romanian President Klaus Iohannis has signed the decree promulgating the Law approving Government Emergency Ordinance 120/2021 on the administration, functioning and implementation of the national RO e-Invoice system and the electronic invoice in Romania, as well as completing Government Ordinance 78/2000 on the approval, issuance of vehicle identity cards and certification of road vehicles’ authenticity with a view to their placing on the market, sale or registration in Romania, as well as on market surveillance for them. According to the Government, this normative act was generated by the need to establish clear and sufficient rules on electronic invoicing.
Marcel Ciolacu, the leader of the Socialist Democratic Party (PSD), said on Monday that the Romanian government should introduce several fiscal changes by the end of this month so that they can be taken into account for next year’s budget. Ciolacu, president of the lower House of Parliament, added that the ruling coalition was already discussing those changes, without giving any concrete examples. No new taxes will be introduced, he added. Taxes will be resized and rearranged so that tax collection should be improved, but this will not involve tax increases, Mr. Ciolacu pointed out. PSD wants to abolish the flat tax rate on individuals’ income, but its coalition partner, the National Liberal Party (PNL), does not support progressive taxation.
Lack of sleep and rest affects not only daily activities and work productivity, but also a person’s long-term health, according to psychiatrist Alexandru Pavel. Studies show that nearly 16% of Romanians suffer from chronic insomnia. Even if it does not seem to be on the list of daily priorities, rest is the most important of all. According to the specialist, the signs of insomnia must be recognized and the person affected by it must seek specialized help.
Romania will reach a population of just 15 million by 2050, in an optimistic scenario, 4 million less than today, according to the conclusions of a conference organized by Sierra Quadrant, one of the biggest players on the Romanian insolvency market. The decrease in the population due to external migration, as well as the sharp drop in the birth rate in Romania in recent years, are the main factors leading to the decrease in population, and this phenomenon will have a significant impact on all levels, but especially on economy.