Daily Newsletter - 8 August 2022


Macroeconomic (4)
Financial (4)
Investment (3)
Legislative (2)
European News (1)
Social (2)
The global food price index remained on a downward trend in July
The global food price index fell in July, for the fourth consecutive month, mainly as a result of significant drops in vegetable oil and cereal indices, according to the Food and Agriculture Organization of the United Nations (FAO). FAO Food Price Index (FFPI) is a measure of the monthly change in international prices of a basket of food commodities, consisting of cereal, vegetable oil, dairy, meat and sugar. In July 2022, this index decreased by 8.6% compared to June, to 140.9 points, down from a revised value of 154.3 points reached in June. Even though the index has fallen in the past four months, is remains 13.1% above its value in July 2021.
Annual inflation rate will record minor fluctuations in Q3/2022
The National Bank of Romania expects annual inflation rate to record minor fluctuations during the period July-September (Q3) 2022, and then to enter a downward trend for three quarters, falling slightly below the mid-point of the target at the end of the projection horizon. The prospects for the levelling off and decrease in annual inflation rely on a milder impact of global supply-side shocks - including in the context of energy price capping schemes to be implemented until March 2023, as well as on sizeable disinflationary base effects, alongside the influences stemming from the likely rapid contraction and closing of the positive output gap in mid-2023, followed by the output gap widening into negative territory.
Romania can record over 5% economic growth per year, according to World Bank estimates
World Bank’s estimates show that Romania can record over 5% economic growth per year until 2030. Government spokesman Dan Cărbunaru has stated that austerity is not the key word during this period, but rather moderation. He has also pointed out that Romania has one of the highest economic growth rates in the European Union.
The number of companies de-registered at national level grew by nearly 9% in H1/2022
The number of companies de-registered at national level grew by 8.77% in the first six months of 2022, compared to the similar period of last year, having reached 35,420, according to statistics from the National Trade Register Office (ONRC). The most de-registrations were recorded in Bucharest – 5,607 (up by 8.81% compared to January-June 2021) and in Timiș County - 1,605 (up 4.15%), Constanța County - 1,584 (up 14.12%) and Cluj County - 1,564 (up 10.92%). At the other end of the classification, the fewest de-registrations were recorded in Ialomița County - 295 (up by 19.43% year-on-year), Călărași - 303 (up 5.57%) and Covasna - 317 (up 6.02%).
NBR has increased the key rate by 0.75%, to 5.50% per year
During the monetary policy meeting on Friday, 5 August, the National Bank of Romania’s Board of Directors decided to increase the key rate from 4.75% to 5.50% per year, and to raise the lending (Lombard) facility rate from 5.75% to 6.50% per year. NBR also raised the deposit facility rate to 4.50% per year, from 3.75% per year, as of 8 August. During the same meeting, NBR Board decided to maintain firm control over money market liquidity and kept the existing levels of minimum reserve requirement ratios on both RON- and foreign currency-denominated liabilities of credit institutions.
Raiffeisen Bank and BCR granted EUR 325 million financing to Romgaz
The transaction through which Romgaz took over ExxonMobil’s stake in Neptun Deep gas project in the Black Sea at the beginning of August was financed from the company’s own sources and from a EUR 325 million syndicated bank loan arranged by Raiffeisen Bank. EUR 200 million of the financing was ensured by Raiffeisen Bank and EUR 125 million was provided by Banca Comercială Română. The loan was granted for a crediting period of five years from the draw date and was entirely used to pay for the acquisition.
Allianz Group reported EUR 81.2 billion total revenues for H1/2022
Allianz Group, present on the Romanian market through Allianz-Tiriac insurance company, ended H1 of 2022 with EUR 81.2 billion total revenues, up by 7.2% year-on-year, while its operating profit only grew by 1.2%, to EUR 6.7 billion, according to the information provided by Allianz representatives on Friday. The group’s solvency ratio was 200%. The institution reached a net profit attributable to shareholders of EUR 2.3 billion, down by 52.7% against Q1/2021, following the increase in provisions in Q1/2022.
Average interest rate on new household deposits exceeded 4% in June
The average interest rate on new RON-denominated household deposits exceeded 4% in June, having reached 4.06%, the highest level of the past decade, while the average interest rate on RON-denominated retail loans grew to 7.75%, the record high of the past almost three years. Higher levels of the average interest rate on new RON-denominated household deposits had been recorded in 2013, while interest rates on loans had climbed to higher levels, of 7.9-8%, in the early 2020s. Moreover, even though the average interest rate for retail deposits in RON had only been 4% in June, major banks offered 6% or even 7% interest on over one year maturities in July, compared to three to four months ago, when they had offered up to 3%.
Romanians who want to make investments can obtain up to RON 200,000
The Ministry of Entrepreneurship and Tourism has announced that Romanians in the diaspora who want to return into the country and invest in a business can obtain up to RON 200,000 financing through the Start-Up Nation program, which has reached its third edition. The maximum sum, of RON 200,000, can be obtained if the project creates at least two full-time jobs. Applicants who undertake to create only one job will be eligible for maximum RON 100,000. Moreover, the beneficiary company must bring co-financing representing at least 5% of the project’s eligible value.
Romanian companies will have over EUR 2.5 billion available for investments in development
Romanian companies will have more than EUR 2.5 billion available in the following months for investments in development, technological upgrading, digitalization or investments in energy efficiency, according to an analysis conducted by REI, one of the largest groups of companies, which specializes in attracting non-reimbursable financing from European funds and state aid for companies in Romania. The same analysis indicates that the Romanian business environment is going through its busiest period so far, in terms of non-reimbursable financing, through European funds, state aid or projects through the National Recovery and Resilience Plan (PNRR).
DB Schenker to continue local investments, in a new terminal in Arad
Albin Budinsky, CEO of DB Schenker in Romania, has stated that large companies are already investing significant sums in technology and the effect of these investments will be seen in the following years, which is why the logistics market will continue to grow. DB Schenker’s CEO in Romania has explained that, despite the new cross-docking terminals already opened in Cluj and Bacău, the company’s next project will be a new terminal in Arad.
Any person with a higher education degree could teach in schools, according to a draft law
Any person with a higher education degree could become a teacher, even if they have not attended and completed psychological-pedagogical training programs or do not have a master’s degree in teaching, according to an exception stipulated in the draft Pre-University Education Law. They would have to take a pedagogical knowledge test, organized by the National Center for Training and Development in the Teaching Career (CNFDCD), as per the aforementioned document.
Public sector employees’ salaries could grow again
Public sector employees could benefit from higher salaries starting from August 2022, the month that has just begun, amid a new draft Government Emergency Ordinance (OUG) that includes substantial salary increases in several institutions. The personnel in public institutions and authorities nominated in project teams financed from non-reimbursable European funds is to benefit from up to 50% salary increases, regardless of the number of projects they are involved in.
European News 
EU countries formally adopted the bloc’s emergency plan to curb gas use
European Union countries formally adopted the bloc’s emergency plan to curb gas use on Friday (5 August), as they attempt to save fuel for a winter of uncertain Russian supplies, despite Poland and Hungary both opposing the final law. EU countries last week struck a deal to reduce their gas demand, to attempt to fill gas storage and prepare for a possible full Russian cut-off. The agreement asks all EU countries to voluntarily cut gas use by 15% this winter and could make the cuts binding in a supply emergency, albeit with numerous opt-outs for some countries and industries.
3,518 new cases of persons infected with SARS-CoV-2 were recorded on 6-7 August
The Ministry of Health has announced that 3,518 new cases of persons infected with SARS-CoV-2 were recorded on 6-7 August, 2,923 fewer than on the previous day. 613 of the new cases reported for the above-mentioned period were re-infected patients who tested positive more than 90 days after their first infection. Eight deaths were reported during the same interval, with 184 more hospitalized people admitted than the previous day.
INS president Tudorel Andrei presented some data from the general population census
Tudorel Andrei, the President of the National Institute of Statistics (INS), has presented some data from the general population census. He has indicated that about 19 million people live in Romania. In the previous census, conducted in 2011, Romania’s stable population was 20.12 million, according to INS. He has added that 95% of the country’s estimated population has filled in the census questionnaires and has pointed out that 46% of the population lives in rural areas.