News

Daily Newsletter - 12 November 2021

Summary

Macroeconomic (4)
Financial (2)
Investment (3)
Legislative (3)
European News (1)
Social (2)
Macroeconomic 
Romania will record economic growth of 7% in 2021 and 5.1% in 2022
Romania’s Gross Domestic Product (GDP) is set to surpass its pre-pandemic levels before the end of 2021, and is expected to grow by 7% in 2021 and by 5.1% in 2022, according to the European Commission’s Autumn 2021 Economic forecast published on Thursday. Moreover, economic specialists point out that the EU economy is recovering from the recession caused by the pandemic faster than expected. As vaccination campaigns progressed and restrictions started being lifted, economic growth was resumed in spring and continued at the same pace throughout the summer, supported by the reopening of economy.
NBR has revised upwards its inflation forecast, estimating a 7.5% rate in December
The National Bank of Romania has revised upwards its inflation forecast, estimating a 7.5% rate in December, 1.9 points above the bank’s estimates in the previous report from August, following the increase in energy prices. Moreover, the forecast for the end of 2022 has been adjusted to 5.9%, 2.5 points above the previous estimates. The explanation for an overwhelming part of these revisions lies with the growing contribution of consumer basket components beyond the scope of monetary policy.
Net wage in economy grew by RON 30 in October
The National Institute of Statistics (INS) announced on Thursday that the average gross nominal wage had been RON 5,732 in September 2021, up by RON 44 (+ 0.8%) compared to August 2021, and the average net nominal wage had stood at RON 3,517, up by RON 30 (+ 0.9%) month-on-month. According to the INS, the highest values of the average net nominal wage were recorded in information technology service activities (including information service activities), of RON 8,578, and the lowest ones were reported in the hotels and restaurants sector, namely RON 1,929.
Specialists expect real inflation to exceed 10%
Specialists expect real inflation to exceed 10%, according to Economics Professor Mircea Coşea, who claims that the official calculation of inflation does not include certain services whose prices have obviously grown, such as medical services. In the economics specialist’s opinion, the National Bank of Romania made a very prudent move on Tuesday, 9 November 2021, by raising the monetary policy interest rate by only 0.25%, but a second key rate increase might follow, as no effort to halt inflation can be seen anywhere else.
Financial 
Liquidity deficit returned onto the interbank market in October 2021
Liquidity deficit returned onto the interbank market in October 2021, after six consecutive months of surplus. Some banks that ran out of RON resorted to loans from the central bank, especially through one-day emergency loans from NBR, through the Lombard facility, while bilateral repo operations were smaller. The liquidity deficit stood at RON 657.9 million in October, after a surplus of RON 4.2 billion had been recorded at the end of the first nine months of 2021, according to the National Bank of Romania.
OTP Bank Romania has granted RON 15 million financing to Nutriva Compound Feed Plant
OTP Bank Romania has granted a RON 15 million loan to Nutriva Compound Feed Plant, from Vaslui County. Moreover, EximBank issued a state guarantee covering 90% of the financing value, within the COVID-19 state aid scheme, dedicated to large companies and SMEs with over RON 20 million turnovers in 2019, according to a press release. The funds granted by OTP Bank Romania, with EximBank’s guarantee, will be used to cover the expenses related to the company’s ongoing commercial contracts, as well as its general expenses.
Investment 
Radisson Blu Hotel in Brasov will be opened at the beginning of next year
Radisson Blu Hotel in Brasov, developed by RaRa Hotels, a company part of RaRa Group, a group controlled by Ramona Neamţu and Răzvan Neamţu, will be opened in the first quarter of next year, according to information provided by hotel representatives. The investment in the accommodation unit in Brasov amounts to EUR 15 million and has been supported through a financial agreement between EximBank and RaRa Group. The opening of the new hotel was delayed by several months due to the effects of the building materials shortage, namely the increase in prices on the one hand, and the long delivery times of materials on the other hand.
A new swimming pool will be built in Vatra Dornei
The government approved, during Wednesday’s meeting, the technical-economic indicators for the construction of a swimming pool in the city of Vatra Dornei, Suceava County. A driveway and a car park for 30 vehicles (including four spaces for people with disabilities) will also be created, as well as a children’s playground and green spaces. The solar power generated by a system of 120 solar panels and a solar station will be used as an alternative source for providing hot water in summer and for supporting the heating system in winter.
A new headquarters for Prosecutor’s Offices, Court of Law and Court of Appeal in Iasi will be built
During Wednesday’s meeting, the government approved the technical-economic indicators for the construction of a new headquarters for the Prosecutor’s Offices affiliated to Iaşi District Court, Court of Law and Court of Appeal. The total value of the investment has been estimated at RON 94.3 million, according to a press release issued by the Ministry of Development. The new building will be developed on a 6,125 square meter land, made available by Iaşi County Council. The building will benefit from design and execution according to the new energy consumption norms.
Legislative 
The Alliance for Romanians’ Unity has submitted a draft law
The Alliance for Romanians’ Unity (AUR) has submitted in Parliament a draft law for the establishment of an emergency authorization procedure for medicines part of the COVID-19 treatment protocol, so that they can become available on the market. The draft law aims at amending Law no. 95/2006 on health care reform, republished.
President Klaus Iohannis signed a new decree on Thursday
The Presidential Administration has announced that on Thursday, President Klaus Iohannis signed the decree for the promulgation of the normative act amending and completing art. 112 of the National Education Law no. 1/2011. The law allows changing the destination of the material base of schools that have been closed for three years, without the Education Minister’s approval and only based on local councils’ decision.
President Klaus Iohannis has promulgated a new law
The Presidential Administration has announced that on Thursday, President Klaus Iohannis signed the decree for the promulgation of the normative act completing art. 109 of Law no. 263/2010 regarding the unitary public pension system. The information documents regarding the amounts paid to the beneficiaries who chose to receive their pensions in a current account or a card account can thus be sent by the National House of Public Pensions (CNPP), upon request, in electronic format, by e-mail or into CNPP’s online account.
European News 
PSD wants National Recovery and Resilience Plan to be renegotiated with EU
Romania’s interim government has adopted the first documents necessary for the implementation of the Recovery and Resilience Plan. However, the Socialists, who could become part of the government next week, want the plan to be renegotiated with the EU. EU finance ministers approved Romania’s resilience plan at the end of October. On Wednesday, the government adopted two memoranda authorizing the Ministry of European Investments and the Ministry of Finance to sign the corresponding agreements with the European Commission. This would allow Romania to receive pre-financing money from the Commission – nearly EUR 3.8 billion – before the end of the year.
Social 
Raluca Turcan says the percentage for the increase in pensions, salaries and allowances is to be set
Interim Labor Minister Raluca Turcan stated on Thursday, following the negotiations with the Social Democratic Party (PSD) on the future governing program, in Parliament, that children’s allowances and pensions would be increased starting from next year, but no percentage would be announced for now, as there would be another discussion with Finance Ministry specialists. Raluca Turcan also said that there was already a decision regarding the increase in the minimum wage as of 1 January 2022.
Authorities estimate the decrease in the number of COVID-19 cases will stagnate
Authorities estimate that the decrease in the number of COVID-19 cases will stagnate in the following period and the number could subsequently grow, given that the cold season has begun and people spend most of the time indoors, schools have resumed activity and, as a result, people’s interaction and mobility will increase. Valeriu Gheorghiţă, the coordinator of the National Committee for the Coordination of Anti-COVID-19 Vaccination Activities (CNCAV), has stated that it is difficult to estimate the extent of the rise in COVID-19 cases.