Romanians’ main reason for concern in this period has to do with inflation, which affects their daily expenses, and most of them feel that the quality of living has decreased in the past eight months, the most affected being those over 55 and those with medium or low incomes, according to a survey conducted by AHA Moments together with Rethink Romania. The rising inflation has led to more prudent behavior, as Romanians choose to consume less, look for promotional offer or prefer cheaper brands - from goods to fuel or utilities. Inflation-related concerns are, however, less visible among the high-income population, the Pareto audience (the top 20% of Romanians in terms of income, who generate 43% of annual revenues).
Romania is close to Portugal in terms of GDP per capita expressed in purchasing power standards (PPS), according to the latest Eurostat data. In 2021, GDP per capita expressed in PPS ranged from 55% of the European Union average in Bulgaria to 277% in Luxembourg, and this indicator was above the EU average in ten Member States. Romania was at 73% of the EU average in terms of GDP per capita expressed in purchasing power standards, close to Portugal which was at 74% of the EU average, Hungary - 76% and Poland - 77%. According to Eurostat, GDP per capita in Romania was higher than in Latvia, with 71% of the EU average, Croatia - 70%, Slovakia - 68%, Greece - 65% and Bulgaria - 55%.
The high inflation is forcing central banks to take an increasingly aggressive stance on key rate increases, according to eToro analyst Bogdan Maioreanu. Romania’s monetary policy interest rate, of 3.75%, is still low compared with neighbouring economies, but the National Bank of Romania’s Governor, Mugur Isărescu, has reiterated that Romania cannot afford to let the gap widen without the risk of seeing capital flow towards other markets. In Poland, the key rate is 6% with a 13.9% inflation rate, Hungary has a 5.9% key rate and 10.7% inflation and the Czech Republic has a 5.75% monetary policy interest rate with 16% inflation. Inflation rate in Romania is 14.49% and NBR will most likely decide upon a more aggressive interest rate increase during the next monetary policy meeting in July, above the 0.5% level currently estimated by analysts, Bogdan Maioreanu has added.
Six of the seven private pension managers to have published their results ended 2021 with a cumulative turnover of RON 578 million, up by 36.4% against the first year of the COVID-19 pandemic. BRD Pensii is the only administrator that has not yet published its results for 2021, the delay being most likely related to the Financial Supervisory Authority (ASF)’s investigation that uncovered several irregularities within the company, which led to the dismissal of its CEO and of its entire Board.
The Competition Council has authorized the transaction through which Dan Ostahie, the businessman who controls the Altex Group, takes over Porsche Bank Romania. Altex Group is organized on several business lines, namely retail, IT services, import, production and distribution of electro-IT&C products, service, non-banking financial services, transport, automotive, real estate. Porsche Bank is part of the Porsche Finance Romania Group. The Group operates in Romania on the financial-banking services market through Porsche Bank Romania S.A. and Porsche Leasing Romania IFN S.A., whose main activity is lending (especially in the form of consumer loans and car leasing).
BCR Leasing, the leasing company part of BCR group, offers access to financial lease financing solutions for the acquisition of motor vehicles and equipment through George digital ecosystem, according to a press release. The solutions target both corporate clients, and micro-entrepreneurs and PFA clients and can be accessed from the George pentru Afaceri (George for Business) store. According to the aforementioned source, BCR Leasing’s offer facilitates George users’ access to financing solutions within the financial lease regime and aims to support Romanian entrepreneurs who want to purchase cars, light and heavy commercial vehicles, as well as other equipment needed to ensure mobility and operational efficiency.
Senior Software, a local provider, developer and integrator of business management software solutions, with a EUR 37 million turnover in 2021, has allocated a EUR 300,000 budget for the development of its operations in Timisoara, the fifth city where the company is expanding. Senior Software currently has four units in Bucharest, Cluj, Constanta and Iasi. The company has a total of 180 employees in the four cities, and plans to recruit 20 people in Timisoara in the first phase, for customer support and for the implementation and sale of software solutions.
Austrian building materials manufacturer Leier has invested EUR 100 million in Romania over the past four years and is now preparing to open a new production section in Iasi, and is also investing in its fifth plant in Arad. The group continues to pursue extensive business development and is looking for opportunities for new investments. The Leier plants in Iasi and Sighisoara, which manufacture masonry and ceramic tiles, merged in 2021 and reported RON 259 million cumulative sales.
Education Minister Sorin Cîmpeanu has stated that investments in education, although insufficient, are almost double in 2022 compared to 2016, i.e. RON 41 billion, compared to RON 21.7 billion. According to a press release signed by Minister Sorin Cîmpeanu, expenditure with education will account for 7.92% of the General Consolidated Budget and for 3.11% of the Gross Domestic Product in 2022.
Individuals and companies affected by the crisis will be able to apply for the deferral of loan payments for a limited period of up to nine months, according to a draft Emergency Ordinance put up for public debate by the Ministry of Finance. The draft normative act aims to create facilities for the payment of instalments and interest due on loans granted to individuals, PFAs, sole proprietorships, family businesses, small and medium-sized enterprises, liberal professions and those practicing under special laws, regardless of the form of practice, and legal entities.
The Ministry of Education announced on Monday, 20 June that it had initiated a draft Emergency Ordinance to extend the pilot program for the provision of food support for pre-school children and pupils from 150 to 300 schools during the 2022-2023 school year. According to a press release issued on Monday, the budget necessary for financing the pilot-program during the school year 2022-2023 is RON 354,900,000.
On Monday, the Senate unanimously voted upon the initiative submitted by Save Romania Union (USR) MP Cristina Prună, through which the hearing of candidates for the National Energy Regulatory Authority (ANRE)’s Regulatory Committee becomes mandatory. The law will be sent for promulgation. There is currently no mandatory procedure for issuing the opinion regarding candidates for ANRE’s Regulatory Committee, USR indicated in a press release.
The Permanent Electoral Authority (AEP) announced on Monday that it had drawn up and put up for public debate the draft Government decision on the organization and functioning of the National Electoral Network. The draft normative act initiated by AEP regulates the attributions, structure, organization and functioning of the National Electoral Network, the organization and conducting of meetings of its working structures, as well as the setting of allowances for its members.
Less natural gas was imported in the first four months of 2022 than in the same period of last year, and local production has also dropped. According to data from the national statistics institute INS, Romania’s gas production was close to 2.38 million tons of oil equivalent (toe) between January and April, which is 6.1% (or 153,700 toe) less than in the same period of 2021, Romanian news agency Agerpres reported. Romania imported during the first four months 802,800 toe of natural gas, a decrease of 6.1% from the similar period of last year. For 2022, Romania’s prognosis commission estimates a local production of 7.45 million toe, an increase of about 2% against last year, while imports are expected to drop 20% to 2.33 million toe.
The school population in the national education system during the school/academic year 2021-2022 was formed of 3,495,800 pupils and students, 1,200 more than in the previous school/academic year. The school population grew by 3.3% in early childhood and pre-school education and by 1.3% in primary and secondary education compared to the previous year. The number of graduates in the school/academic year 2020-2021 was 476,600 pupils and students, down by 7.5% year-on-year, according to the National Institute of Statistics (INS). During the school/academic year 2021-2022, nearly half of the school population was in primary and secondary education (46.1%), and about one third was in high-school and early childhood and pre-school education (17.1% and 15.4% respectively).