News

Daily Newsletter - 25 November 2022

Summary

Macroeconomic (3)
Financial (3)
Investment (4)
Legislative (2)
European News (1)
Social (2)
Macroeconomic 
Romania collects only 2.4% of GDP in income tax, compared to 9.8% EU average
A comparative analysis of Eurostat data shows that the biggest problem when it comes to Romania’s state budget collection, compared to the European average, has to do with income tax. In 2021, the latest year which aggregate data at Eurostat level is available for, Romania collected 2.4% of GDP in income tax. As a comparison, Bulgaria, which has a similar same tax rate (10%), collected 3.3% of GDP in 2021. The European average is at nearly 10% of GDP.
Finance Minister says forecasts show 1.8% economic growth for Romania
Public Finance Minister Adrian Câciu has stated that forecasts show Romania’s economy will grow by 1.8% in 2023. He has also indicated that all projections do not show economic decline, but a slowdown or a reduction of economic growth. Moreover, the minister has pointed out that the government needs to work on measures to restart economy in order to see an increase in financial forecasts.
German companies in Romania expect the international context to deteriorate
German companies in Romania say their economic situation is good or satisfactory, even though most of them expect the international context to deteriorate within the following 12 months, according to the survey conducted by the Romanian-German Chamber of Commerce and Industry (AHK Romania) in October 2022. According to a press release issued by the organization, the survey asseses the overall economic situation and companies’ situation and provides an overview of the main economic risk factors from companies’ perspective, in general.
Financial 
Banks have launched a service aimed at preventing online fraud
Banks in Romania offer clients a new facility that allows verifying the identity of the real beneficiary of payments through the Beneficiary Name Display Service (BNDS), which aims to prevent fraud among clients making electronic payments and reduce erroneous transactions caused by the wrong entry of the beneficiary (IBAN account). In the pilot phase, the Beneficiary Name Display Service is available at CEC Bank, ING Bank and Libra Internet Bank, while the other banks will offer this facility starting from 2023.
Deposits of non-government resident clients decreased by 0.2% in October 2022
Deposits of non-government resident clients decreased by 0.2% in October 2022 compared to the previous month, to RON 490,803.2 million, and grew by 7.1% year-on-year (-7.1% in real terms), according to data reported by the National Bank of Romania (NBR). Residents’ RON-denominated deposits, representing 63.6% of total deposits of non-government clients, increased by 0.3% compared to September 2022, to RON 312,185.5 million, and were up 6.1% year-on-year (-8.0% in real terms).
Loans to non-government sector decreased by 0.3% in October 2022
Loans to non-government sector granted by credit institutions decreased by 0.3% (-1.6% in real terms) in October 2022, compared to September 2022, to RON 363,591.0 million, according to data from the National Bank of Romania. RON-denominated loans, representing 70.3% of the total volume of loans to non-government sector, dropped 0.8%, while foreign currency-denominated loans, accounting for 29.7% of total loans to non-government sector, grew by 0.9% when expressed in RON (1.6% when expressed in euro).
Investment 
Germans from Stada start construction works on over EUR 50 million plant in Turda, Cluj
Stada Romania has started construction works on its medicines plant in Turda, Cluj County, an investment announced earlier this year. The investment is worth more than EUR 50 million and is the first such project carried out by an international player in the past 30 years. The future plant is located in Arieș Industrial Park, and part of the investment is borne by authorities through a EUR 21 million state aid that has already been approved. The Stada Group has 20 other plants at international level.
Sphera Franchise Group opens 15th Taco Bell restaurant
Sphera Franchise Group, the company that manages the Taco Bell brand, a chain of Mexican-inspired restaurants – within a franchise system - has expanded its local network by opening its first unit in the city of Craiova, according to a press release. Taco Bell thus continues its expansion strategy on the local market, having managed to reach a portfolio of 15 units at national level in just five years. The value of the investment in the new restaurant amounts to approximately EUR 480,000.
Indotek Group invests EUR 15 million in expansion and renovation of Promenada mall
Indotek Group, an investment group from Hungary, has announced the expansion by nearly 50,000 square meters and the renovation of Promenada shopping center in Târgu Mureş. The project will be implemented in two phases. The investment, worth nearly EUR 15 million, is part of Indotek Group’s development strategy in the region. In the first phase of the modernization works, the company is to renovate the interior and the façade of the shopping center, and will then expand the current area.
Austrotherm is investing and expanding in Romania
Austrotherm, a leader in the field of eco-friendly thermal insulations in Central and Eastern Europe, has inaugurated its third thermal insulations plant in Călan, near the city of Deva. Austrotherm EPS plant produces for the Romanian market. With this new opening, the insulation pioneer is now able to deliver environmentally friendly expanded polystyrene to the west of Romania more rapidly and more efficiently. Investment costs for the Greenfield project amounted to approximately EUR 6 million.
Legislative 
CCR to analyze challenges to draft law amending Tax Code
On 14 December, the Constitutional Court of Romania (CCR) will analyze the challenges submitted by the Opposition and by the Ombudsman to the draft law amending the Tax Code and maintaining the over-taxation of part-time employment contracts. Overtaxing part-time work violates several articles of the Constitution of Romania regarding the right to work and the fair distribution of the tax burden, the two Opposition parties argue.
RWEA calls on President to decide on measures to support investments in renewable energy
The Romanian Wind Power Association (RWEA) and the Employers’ Organization of Renewable Energy Producers in Romania (PATRES) have called on the President of Romania, the Government and the Parliament to decide upon urgent measures to avoid mass destruction of existing investments in renewable energy, in full winter and energy crisis. The organizations’ representatives have indicated that the new provisions in the draft law approving Government Emergency Ordinance (OUG) 119/2022, adopted during the Chamber of Deputies’ plenary session, force several units producing thousands of MW of renewable power (wind and solar) into insolvency.
European News 
European nations to boost spending on space by 17%
European nations agreed on Wednesday (23 November) to boost spending on space by 17% to stay on the heels of United States and China in two days of intense bargaining overshadowed by rising energy prices. The European Space Agency (ESA) said its 22 member states had agreed to provide EUR 16.9 billion (USD 17.5 billion) for projects from the search for past life on Mars to climate research in 2023-25, up from EUR 14.5 billion in the previous period.
Social 
Students from disadvantaged backgrounds received vouchers for clothing and school supplies
The Ministry of Investments and European Projects has announced that more than 160,000 children from disadvantaged backgrounds have received RON 500 vouchers for clothing and school supplies, while another 200,000 cards will be delivered to county school inspectorates for new beneficiaries in the following period. The electronic social vouchers for educational support can only be used in units which the card issuers have concluded affiliation contracts with.
Social and economic pressures are the sustainability issues affecting Romanians
Social issues, especially labor exploitation, poverty and access to healthcare services, are among the ten most important sustainability-related issues that companies in Romania currently need to address, according to Kantar’s Sustainability Sector Index, a press release indicates. Kantar’s proprietary methodology, which is in line with the UN’s 17 Sustainable Development Goals, measures the importance of sustainability issues to people and how much they associate such issues with particular sectors and industries.