News

Daily Newsletter - 3 February 2023

Summary

Macroeconomic (4)
Financial (3)
Investment (4)
Legislative (3)
European News (1)
Social (2)
Macroeconomic 
Total foreign investments in Romanian companies exceeded EUR 50 billion in 2022
Total foreign investments in Romanian companies exceeded EUR 50 billion in 2022. The top three sources of investments were the Netherlands (EUR 9.3 billion), Germany (EUR 5.4 billion) and Austria (EUR 5.3 billion), according to data from the National Trade Registry Office analyzed by the ONV LAW Law Firm. The biggest foreign investments were absorbed by local companies activating in wholesale and retail trade and in the field of automotive and motorcycle repair (25.05%), by those in the segment of professional, administrative, scientific and technical activities (20.81%) and by those operating in transport, storage and communications (19.6%).
Total industrial producer prices grew by 32.8% in 2022
Total industrial producer prices (domestic and external markets) grew by 32.8% in 2022, after the energy industry posted a 69% advance, according to data from the National Institute of Statistics (INS). Moreover, the production of non-durable goods recorded a 20.5% increase in costs, the intermediate goods industry - 16% and the durable goods industry registered a 14.8% advance in prices. The smallest price increases were recorded in the capital goods industry, of 9%.
Nearly a quarter of Romanian investors fear a global recession this year
Nearly a quarter of Romanian investors (23%) fear a global recession this year, 21% fear inflation and 18% fear an international conflict, according to a survey conducted by an investments platform. Moreover, 9% of them fear a possible increase in taxes. 28% of Romanian individual investors still consider inflation as the biggest risk to their portfolio in the first three months of this year. Inflation is followed in the risks ranking by a possible recession of global economy, by international conflicts and by concerns related to the state of Romanian economy.
Euro area inflation slowed in January for the third consecutive month
Euro area inflation slowed in January for the third consecutive month, to 8.5%, amid a significant drop in energy costs, according to preliminary data published on Wednesday, CNBC reports. Inflation rate was 9.2% in December. Energy remained the biggest cost generator in January, but costs fell again compared to previous levels. Energy price inflation slowed to about 17.2% in January from 25.5% in December. However, food costs rose slightly from 13.8% in December to 14.1% in January. The 20-member region experienced substantial price increases in 2022 after Russia’s invasion of Ukraine led to rising energy and food costs.
Financial 
Finance Ministry borrowed RON 1.08 billion from banks through a government bonds auction
The Ministry of Finance borrowed RON 1.08 billion from banks on Thursday, 2 February, through a government bonds auction with a nominal value of RON 500 million, maturing in April 2036, at an interest rate of 7.46% per year. Seven primary dealers participated in the auction. Total demand amounted to RON 1.9 billion, of which banks bid RON 1.86 billion on their own behalf and RON 10 million on behalf of clients. The coupon rate was 4.25% and the yield to maturity for the average auction price was 7.43%.
Ștefan Stavrositu was appointed Chairman of BCR Asigurări de Viaţă VIG’s Board of Directors
Ștefan Stavrositu, a former Sales Director at Groupama, has been appointed Chairman of BCR Asigurări de Viaţă VIG’s Board of Directors, having taken over from Erwin Hammerbacher, who retired at the end of 2022. Ștefan Stavrositu’s mandate was approved during the Financial Supervisory Authority’s meeting on Wednesday, 1 February. Erwin Hammerbacher has held the position of Chairman of BCR Asigurări de Viaţă VIG’s Board of Directors since October 2017, and prior to this appointment, he had been a member of BCR Asigurări de Viaţă VIG’s Supervisory Board.
Acquisition by OTP of Nova KBM was approved by Slovenian antitrust authorities
The acquisition by OTP of Slovenian bank Nova KBM has been approved by Slovenian antitrust authorities. Once the transaction is completed, the merger process between SKB and Nova KBM will begin and Slovenia’s largest bank - in terms of deposits and loans - will result from it. Following the finalization of this transaction, OTP will become the leading bank on the Slovenian market. Even though the value of the deal has not been made public, the Hungarian financial institution allegedly paid almost EUR 1 billion, according to media reports.
Investment 
IKEA is preparing to open its third store in Romania, in Timisoara
Furniture and home decoration retailer IKEA, one of the biggest such retailers on the local market, is to open its third store in Romania this summer, where it has already recruited about 50 employees. The company is still looking for another 250 people for this store, which it started building in November 2021. The investment amounts to EUR 60 million, and the store will have a 26,000 square meter area and will be located on an 85,000 square meters plot of land. The warehouses will spread on 4,000 square meters, according to data previously provided by the company.
Romanian medicines manufacturer Antibiotice plans to invest over RON 88 million in 2023
Romanian medicines manufacturer Antibiotice plans to invest over RON 88 million in 2023 in its production platform in Iasi, from its own sources and from reserves, according to the revenues and expenditure budget proposed by the company for 2023. Most of the proposed budget is for new investments - almost RON 32 million, half of the sum being dedicated to the development of the products portfolio. Antibiotice Iasi has a strong research division, a clinical trials center since 2006, both for its own products and for external clients in Europe.
Medisprof will start construction works on second cancer hospital in Cluj Napoca next year
Medisprof Cancer Center, a company founded by physician Carolina Udrea that owns a hospital in Cluj Napoca providing services to cancer patients, will start construction works on its second oncology hospital next year. The new diagnostic and treatment center will spread on almost 7,000 square meters, double the size of Medisprof Cancer Center’s (MCC) current hospital. Construction costs have been estimated at EUR 12 million and the investment in latest generation equipment will be EUR 10 million. Construction works will start in 2024 and the completion time is 24 months, according to officials.
Scandinavian retailer JYSK plans to open at least 15 new stores in 2023
Scandinavian furniture and home products retailer JYSK continues its expansion in Romania and plans to open at least 15 new stores in 2023 and to modernize at least 13 older stores. The first store to be modernized this year is JYSK Brasov Coresi, which will reopen on 9 February 2023. JYSK plans to modernize another 12 stores By August 2023. The first new store this year is planned for the end of February in Târgoviște, and in spring the retailer will inaugurate 4 more new stores in Dej, Rădăuți and Câmpulung Muscel.
Legislative 
CCR finds OUG on transport of students going to school in another locality is unconstitutional
The Constitutional Court of Romania (CCR) has found that the Government Emergency Ordinance on the transport of students who go to school in a different locality than the one they reside in is unconstitutional. In essence, the Court has acknowledged that no evidence was provided that the Economic and Social Council’s opinion had been requested, in violation of the provisions of Article 1(3) and (5), corroborated with those of Article 141 of the Constitution. As a consequence, Government Emergency Ordinance 50/2021 was declared unconstitutional in its entirety, according to a press release issued by the institution.
Two draft laws aimed at increasing birth rate in Romania will be submitted to Parliament
Two draft laws completing the package of measures aimed at increasing birth rate in Romania will be submitted to Parliament. They aim to ensure a child-raising allowance and respect in public for pregnant women or parents with children under five. The minimum value of the allowance will therefore be 60% of the gross minimum wage in economy and the maximum amount will be four times the value of the gross minimum wage, i.e. RON 12,000, compared to RON 8,500 at present.
Government amends law on sale of Petrom shares to former employees
In February, the government wants to start amending the primary legislation on the obligation to sell OMV Petrom shares from the state’s stake in the largest oil and gas producer in Romania, controlled by the Austrian group OMV, to former employees of the company from 1997-2004, as the Energy Ministry is due to issue an order, at the middle of the month, setting out the procedures, deadlines and conditions for the sale of shares. This concerns the amendment of Government Ordinance 55 of 14 August 2003 on certain measures for the privatization process of "Petrom" SA Bucharest National Oil Company.
European News 
EU Parliament adopts position on political advertising regulation
EU lawmakers approved the internal market (IMCO) committee’s text on the Regulation on Political Advertising, paving the way for the next phase of the legislative process. MEPs on Thursday (2 February) voted in favour of IMCO’s report on the initiative, with none of the amendments tabled at the plenary stage adopted. The measure passed with 433 votes in favour, 61 against and 110 abstentions. The regulation, originally announced in December 2020 as part of the Commission’s Democracy Action Plan, is intended to increase the transparency of political advertising and tackle the issue of foreign interference in electoral campaigns.
Social 
A total of 98,011 cases of acute respiratory infections were reported on 23-29 January
A total of 98,011 cases of acute respiratory infections - clinical influenza, acute upper respiratory infections (ARI) and pneumonia - were reported during the period 23-29 January, the National Institute of Public Health (INSP) announced on Thursday, 2 February. According to the source, there were 5% fewer cases compared to the previous week. The number of cases recorded in the same week of the last epidemic season (2019-2020) was 102,981, the INSP indicated.
Romanians spend the most money among Europeans on food
Romanians spend the most money among Europeans on food - RON 250 out of RON 1,000 -according to Eurostat data. Experts say the high prices, compared to the low wages, combined with the food waste that characterizes Romania are to blame for this situation. In 2021, EU households spent more than EUR 1.035 billion (equivalent to 7.1% of total EU GDP) on "Food and non-alcoholic beverages". This represents a 14.3% share of total household expenses, compared to the 14.8% share recorded in 2020.