News

Daily Newsletter - 11 May 2022

Summary

FIC (1)
Macroeconomic (4)
Financial (3)
Investment (4)
Legislative (2)
European News (1)
Social (2)
FIC 
Romania loses tens of thousands of people able to work due to cancer
Romania loses tens of thousands of people able to work to cancer every year - or ends up paying millions of euros for their illness because it has not invested in their health in time. As an example of best practice, Western European countries have increased the life expectancy of patients suffering from heart diseases (affecting more and more young and middle-aged people in their prime) by ten years, by increasing the number of heart attack management centers. Ramona Jurubiță, FIC Vice-President stated that: it is necessary to correlate health policies with policies of economic development in order to reduce the burden of the disease on active people. FIC Vice-President discussed about Va Urma, a macroeconomic model which started in 2016, setting the ambition for Romania to become the tenth EU economy. Va Urma proposes a strategic objective and general recommendations in order to reduce the number of years of inactivity among the population, caused by diseases.
Macroeconomic 
EBRD has reduced its economic growth forecasts for Romania for 2022 and 2023
The European Bank for Reconstruction and Development (EBRD) has reduced its economic growth forecasts for Romania for 2022 and 2023, following a 5.9% recovery in 2021, mainly generated by the robust private consumption, according to a report published by the international financial institution on Tuesday. Romania’s economy is expected to grow by 2.5% in 2022, compared with a 2.8% advance forecast in March 2022, and by 3% in 2023, compared with the 4.1% previously estimated level. According to the EBRD, economy entered 2022 with a weakened position, following a 0.1% GDP decline in Q4/2021, due to the dropping investments and the slowing inventory accumulation.
Investor confidence index regarding euro area activity fell more than anticipated in May 2022
The investor confidence index regarding activity in the euro area fell more than anticipated in May 2022 as well, according to the latest report from Sentix GmbH. The value of the aggregate index dropped 4.6 points, to -22.6 points, the lowest level since June 2020, as the expectations index was down 4.2 points, to -34 points, the record low since December 2008. The current conditions index decreased by 5 points, to -10.5 points, the lowest level since March 2021.
Exports grew by 24.4% in the first three months of 2022, to EUR 22.03 billion
Exports grew by 24.4% in the first three months of 2022, to EUR 22.03 billion, and imports were up 26.7%, to EUR 29.2 billion. The trade balance deficit stood at EUR 7.16 billion in Q1/2022, up by EUR 1.83 billion against the similar period of 2021, according to data published by the National Institute of Statistics on Tuesday. During the interval 1 January - 31 March 2022, important shares in the structure of exports and imports were held by the following groups of products: transport equipment and vehicles (42.9% for exports and 32.7% for imports) and other manufactured products (30.9% for exports and 28.9% for imports).
Annual inflation rate is expected to accelerate in Q2 of 2022
NBR’s updated forecast shows further considerable deterioration in the inflation outlook, as the projected trajectory of annual inflation is further broadly revised upwards over the entire forecast horizon, under the strong impact of global supply-side shocks, amplified and prolonged by the war in Ukraine and the sanctions imposed on Russia. Thus, the annual inflation rate is expected to accelerate its rise in Q2/2022 and to drop only gradually in the following four quarters, but more gradually thereafter, amid broad base effects and as the aggregate demand surplus shrinks to near zero. Inflation dynamics are therefore likely to rise considerably above previously projected levels and fall to single-digit levels only in H2/2023, remaining above the target range at the end of the forecast horizon.
Financial 
NBR has increased the key rate to 3.75%, from 3%
On Tuesday, 10 May 2022, the National Bank of Romania’s Board of Directors decided to increase the monetary policy interest rate to 3.75% per annum, from 3% per annum, starting from 11 May 2022, according to a press release issued by the central bank. Moreover, the institution’s representatives also decided to raise the lending (Lombard) facility rate to 4.75% per annum, from 4%, and the deposit facility rate to 2.75%, from 2% per annum.
Agro-Chirnogi Calarasi agricultural holding takes RON 40 million financing from EximBank
Agricultural holding Agro-Chirnogi Călăraşi, one of the biggest players in Romanian agribusiness, has contracted RON 40 million financing from EximBank to cover the company’s day-to-day operations. The funds were granted with a state guarantee issued within the COVID-19 state aid scheme, dedicated to large companies, which covers 90% of the financing. Agro-Chirnogi activates in the grains production and trading sector. The company was founded in 1991, being the former IAS Chirnogi, from Calarasi County, and, since 2002, has been part of Maria group of companies, one of the largest in Romania, controlled by Lebanese investors.
ING Bank allows financial pre-approval of mortgage loans directly from Home’Bank
ING Bank has decided to simplify the mortgage lending process by allowing financial pre-approval for mortgage loans directly from the ING Home’Bank internet and mobile banking app. This way, people interested in buying a residence can immediately learn the maximum amount they can borrow, without having to go to an ING Office. The new functionality, which will be available starting from this week, allows setting a maximum budget before analyzing existing offers on the real estate market.
Investment 
Medicines manufacturer Zentiva has invested EUR 44 million in Romania in the past 12 years
Zentiva Bucharest, the medicines plant which has been present on the local market for 60 years, has invested a total of EUR 44 million in the past 12 years in its production unit in Bucharest, according to the company. Investments mainly targeted an increased production capacity and the acquisition of equipment. All local entities owned by Zentiva in Romania have reported a EUR 203 million turnover for 2021, which means the combined figures of Zentiva S.A, Labormed Pharma, Labormed Trading, Be Well Pharma and Solacium Pharma.
Bolt announces EUR 150 million investments in micro-mobility
Estonian company Bolt, Europe’s biggest electric scooters operator, has announced a 500% year-on-year increase in the number of electric scooter rides in March and EUR 150 million investments to expand its electric scooters and electric bikes operations. The company’s fleet will exceed 230,000 electric scooters and bikes by the end of this year. The Estonian company is present in seven cities, three of which have been launched this year, and will be present with micro-mobility services in several cities across the country by June.
Philip Morris Romania announces it will invest more than USD 100 million in 2022-2023
Philip Morris Romania has announced that it will invest more than USD 100 million in 2022-2023. Philip Morris International’s investments in Romania have reached almost USD 100 million in the past year alone. USD 500 million has been invested in the plant in Otopeni Since 2017 up to present. During the period 2022-2023 as well, PMI will continue to increase its production capacity.
Agriculture Ministry takes over PNRR investment to equip 57 agricultural high schools
The Ministry of Agriculture will take over from the Ministry of Education a EUR 44 million investment from the National Recovery and Resilience Plan (PNRR)’s funds, to equip the 57 agricultural high schools in Romania, Secretary of State in the Ministry of Agriculture, Sorin Moise stated on Tuesday. He pointed out that young farmers would play a special role in the future National Strategic Program (PNS), and that the programs dedicated to them would have separate allocations.
Legislative 
PNL MPs Luminița Barcari and Cristina Vecerdi submitted a draft law in Parliament
Deputies Luminița Barcari and Cristina Vecerdi, from the National Liberal Party (PNL), have submitted a draft law in Parliament which stipulates that the school curriculum will also include first aid notions, in the subject of Biology-Anatomy and Human Physiology. The notions would be taught to pupils in the 7th grade and would be completed in the 11th grade. Luminița Barcari has indicated that first aid courses are currently optional.
PSD leader Marcel Ciolacu said a discussion on Constitutional reform should be launched
Marcel Ciolacu, the leader of the Social Democratic Party (PSD), stated on Tuesday that a discussion on the reform of Romania’s Constitution should be launched. He said there was currently a majority of over 65% in Parliament, but did not give any details about how the fundamental law should be modernized. He did not offer any information on the timetable of amendments to the Constitution, but pointed out that a special parliamentary committee must be set up, the same as in the case of changes operated to national security laws.
European News 
Centrist MEPs ask Romanian leaders why they oppose changing EU treaties
The centrist party USR (Renew) delegation to the European Parliament asked Romanian President Klaus Iohannis and Prime Minister Nicolae Ciuca to explain why Romania joined 12 other member states that oppose EU reform. Dacian Ciolos said he was surprised to find out that Romania opposes some changes to the EU structure to its advantage, like increasing the EU’s competencies on healthcare and simplifying EU decision-making. Thirteen EU member states, including Romania, other Central and Eastern Europe countries, and the Nordics, launched a non-paper about potential changes to the EU treaties, saying that "Treaty change has never been a purpose of the Conference".
Social 
26,214 people died in March 2022, 3,291 fewer than in February 2022
The number of deaths registered in March 2022 was 26,214 (13,804 men and 12,410 women), 3,291 fewer (1,799 men and 1,492 women) than in February 2022, according to data published by the National Institute of Statistics (INS) on Tuesday. 70% of the total number of deaths was registered among people aged over 70. Moreover, 13,271 babies were born in March 2022, 1,454 more than in February 2022.
Gabriela Firea wants reduced tax for mothers with more than three children
Supporting a reduced tax rate for mothers with more than three children and recognizing the child-raising period as a contribution period are among the Family Affairs Ministry’s priorities, Minister Gabriela Firea has announced. She has indicated that Family Ministry representatives are discussing with the Ministry of Finance legislative changes to establish gender quotas among employees, following the model already implemented in other European countries, by amending OUG 109/2011 on corporate governance of public companies, the introduction of tax benefits for mothers, including by reducing the amount of taxes paid by mothers with more than three children and the recognition of the child-rearing period as a contribution period.