Daily Newsletter - 11 January 2022


FIC (1)
Macroeconomic (3)
Financial (4)
Investment (3)
Legislative (1)
European News (1)
Social (2)
FIC representatives met with Parliament representatives

Representatives of the Foreign Investors Council, together with the representatives of the Romanian Association for Packaging and Environment and of "Berarii României" Association met with Parliament representatives to present the point of view of the business environment on Government Emergency Ordinance no. 6/2021, aimed at reducing the environmental impact of certain plastic products. The chairman of the Parliament’s Committee for Environment and Ecological Balance, PNL deputy George Stângă, who attended the meeting, stated that through this normative act, Romania has transposed into national legislation the provisions of Directive 2019/904/EU on the reduction of the impact of certain plastic products on the environment. The investors proposed amendments and modifications in order to clarify the legislative act and ensure a proper implementation.

Romania’s trade balance deficit grew by EUR 4.93 billion
Romania’s trade balance deficit (FOB/CIF) amounted to EUR 21.369 billion in the first 11 months of 2021, up by EUR 4.929 billion compared to the same period of 2020, according to data from the National Institute of Statistics (INS). According to the INS, FOB exports totaled EUR 7.087 billion and CIF imports totaled EUR 9.246 billion in November 2021, which resulted in a EUR 2.159 billion deficit. Exports grew by 17.5% and imports increased by 21.5% compared to November 2020. Moreover, FOB exports totaled EUR 68.166 billion (up by 19.4% year-on-year) and CIF imports amounted to EUR 89.536 billion (up by 21.7%) during the interval 1 January - 30 November 2021.
Economic sentiment in Romania improved considerably in December 2021
Economic sentiment in Romania improved considerably in December 2021, the first month of growth after four consecutive months of deterioration, according to the Economic Sentiment Indicators (ESI) calculated by the European Commission. The decrease in the ESI indicators during the period August-November illustrates the weak dynamics of economy compared to the months of spring and summer 2021, when the Romanian economy had reached its maximum growth rate following the elimination of pandemic restrictions. The extremely strong fourth wave of the pandemic seriously affected economic activity, and economy (GDP) only grew by 0.4% quarter-on-quarter in Q3, largely due to the significant positive contribution of agriculture.
Annual inflation rate is likely to rise gradually over the months ahead
The National Bank of Romania has announced that the annual inflation rate is likely to rise gradually over the months ahead, under the impact of supply-side shocks, exceeding the values shown over this time horizon by the medium-term forecast from November 2021. According to the aforementioned source, the worsening of the short-term inflation outlook is mainly due to the expected extensive increases in electricity and natural gas prices – even amid the implementation of measures to compensate and cap such hikes – as well as in processed food prices, mainly amid the advance in energy and agri-food commodity prices. Their impact is likely to amplify and further prolong the positive deviation of the annual inflation rate from the upper bound of the variation band of the target, a press release issued by NBR indicates.
NBR has increased the key rate to 2% per year
During the monetary policy meeting on 10 January 2022, the National Bank of Romania’s Board of Directors decided to increase the key rate to 2% per year, from 1.75% per year, as of 11 January 2022 and to raise the lending (Lombard) facility rate to 3% per year, from 2.50% per year. Moreover, the National Bank decided to extend the symmetric corridor of interest rates on standing facilities around the policy rate to ±1.00%, from ±0.75%. Furthermore, the deposit facility rate was kept at 1% per year. NBR indicated, in the press release issued after the monetary policy meeting that it intended to maintain firm control over money market liquidity and to keep the existing levels of minimum reserve requirement ratios on both RON- and foreign currency-denominated liabilities of credit institutions.
NBR once again became the net lender to the banking system
The National Bank of Romania (NBR) once again became the net lender to the banking system, but preferred to provide cheaper financing and not to accelerate interest rate increases, despite inflation approaching 8% per year. Banks went from an average daily liquidity surplus of RON 3 billion in November, to an average deficit of RON 4.7 billion in December, according to data analyzed by NBR also resumed banks’ financing through repo operations after a half-year break. Banks received nearly RON 4.5 billion (daily average) on 1.75%, the monetary policy interest rate. The central bank could have pushed short-term rates even higher had it let banks resort to the Lombard facility alone (through which they only took RON 427 million, compared to RON 791 million in November), where the interest rate is 2.5% per year, but it preferred a less sharp rise in interest rates.
First Bank has been launching a new collection of cards
First Bank has been launching a new collection of its own cards, which it has turned into unique artistic accessories inspired by the American art. This is a unique concept on the Romanian market and is in line with the bank’s modern image. The new cards have been designed by Cheil | Centrade and focus on the already known and reinterpreted brand identity elements. The first three cards of this collection, Visa Shop & Cash, Visa Business Debit EUR and Debit Visa Platinum RON, are already available in all the bank’s branches. All customers opening new accounts, as well as those who need to replace old cards will benefit from the new design cards. The entire new collection of cards will be launched by the end of 2022.
OMNIASIG paid over RON 2.1 million compensations to SIDE GRUP SRL
At the end of December 2021, OMNIASIG Vienna Insurance Group paid over RON 2.1 million compensations to SIDE GRUP SRL, an intermediary in the trade in non-food products, following a fire that had broken out nearby, at the end of September 2021, according to a press release. The insured company’s stockpiles were completely destroyed due to the fire. Two compensation cases were opened as a result of this fire, one for the stock of goods and one for the profit losses incurred due to the company’s inactivity.
Elfi will invest into a new toilet paper and kitchen towels production line
The company Elfi plans to invest into a new production line in 2022. The project will start in the second half of 2022 and will be finalized in 2023. The new production line will have a capacity of 600 tons and can process both toilet paper and kitchen towels. The company Elfi from Albota (Argeș County), one of the biggest toilet paper manufacturers on the local market, controlled by a Romanian entrepreneur, estimates a 20% increase in its turnover this year, from RON 30 million last year, according to company officials.
TeraPlast will finalize its investment in the polyethylene products plant in Q1/2022
TeraPlast, the biggest Romanian building materials manufacturer, will finalize its investment in the polyethylene products plant in Q1/2022, a EUR 10 million project, of which EUR4.9 million is state aid. The group further plans to invest in greenfield projects, in equipment, in technological solutions and digitalization and does not exclude applying for new state support schemes. The group is implementing projects totaling EUR 32 million, aimed at both expanding new production capacities and at creating new business lines, which also generate 200 new jobs.
Government announces over EUR 16 billion investments for energy sector development
During an informal meeting on Monday, 10 January, the Government analyzed the over EUR 16 billion financing Romania can benefit from until 2030 to develop its energy sector, within the transition to an environmentally friendly economy and to combat the effects of climate change, according to a press release issued by the Romanian Executive. Prime Minister Nicolae Ciucă called for prioritizing, within this process, the generation of own production capacities for the necessary components for renewable energy projects, as such an approach will generate economic benefits, through sustainable, horizontal development of production capacities in the energy sector, and will lead to the creation of new jobs in future technological fields.
The law allowing the shooting of aggressive animals has been sent back to Parliament
Romanian President Klaus Iohannis sent the Law approving Government Emergency Ordinance no. 81/2021 to Parliament for reanalysis on Monday, 10 January 2022. The law approves immediate intervention methods to prevent and combat attacks by brown bears on persons and their property in the built-up areas of localities, and amends and completes certain normative acts.
European News 
Vaccination against Covid-19 will not be mandatory in Romania, according to Health Minister
Vaccination against COVID-19 remains very important, but it should not be mandatory in Romania, Health Minister Alexandru Rafila has stated, adding that the current vaccines do not stop virus transmission, but are effective in preventing many deaths and the overcrowding of the health system. He has added that annual vaccination could be recommended later if available vaccines cover the dominating variant of the coronavirus, and they should primarily address the main risk categories. In the meantime, the number of cases has grown considerably in Romania in the past week. Minister Rafila has pointed out that the fifth pandemic wave has already started.
Schools with less than 60% of personnel vaccinated against Covid-19 switch to online classes
Education Minister Sorin Cîmpeanu announced on Monday, 10 January, that kindergartens and schools with less than 60% of the personnel vaccinated against Covid-19 would switch to online classes if the infection rate in their locality exceeded 3 cases per one thousand inhabitants. The new measure will enter into force on 17 January. The Minister explained that Article 3 of the joint order related to the vaccination rate on Friday; therefore, if the incidence rate is above 3 per one thousand, schools in that locality will switch to online starting from next Monday.
INS estimates 8,000 more unemployed in November than in October
The seasonally adjusted unemployment rate in November 2021 was 5.2%, similar to the one recorded in October, according to provisional data published by the National Institute of Statistics (INS) on Monday. The number of unemployed people aged 15-74 estimated for November is thus 432,000, up by 8,000 against the previous month, but lower than in November 2020, when 517,000 unemployed people had been recorded, the data published by the INS also indicate. Unemployment rate by gender stagnated at 5.5% in the case of men in November 2021, up by 0.6% compared to unemployment rate among women (4.9%).