Daily Newsletter - 13 May 2022


FIC (1)
Macroeconomic (3)
Financial (3)
Investment (4)
Legislative (2)
European News (1)
Social (3)
Foreign Investors Council published the FIC Business Sentiment Index, spring edition 

The Foreign Investors Council published the Business Sentiment Index (BSI) results for the latest edition, spring 2022. The survey shows that there is a moderate optimism among investors, however it is impacted by uncertainty and current challenges such as: energy market crisis, military conflict in Ukraine, inflationary pressures affecting supply chains and customer demand, including the erosion of end-user disposable income, which possible effects were highlighted in the May edition of the Inflation Report published by the National Bank of Romania (NBR). Companies want to invest in Romania, half of the respondents estimate that for this year the planned investments are at similar levels to last year, and 40% of respondents say they plan to invest larger amounts compared to the previous period. have plans to expand their workforce and 37% keep these plans for the next 12 months at levels similar to last year. The sentiment remains that there is a need for labor, but unfortunately the perception of the availability of adequate staff remains reserved, only 45% of respondents believe that labor force is competitive. Reforms are still needed in key areas such as infrastructure, transparency, and coherence in the application of public policies, reducing bureaucracy and the burden of regulations.

FIC Business Sentiment Index: Moderate optimism among investors

Foreign investors in Romania: There is a desire to invest in Romania. Half of the investors say they will make investments

The companies maintain a moderate optimism regarding the Romanian business environment. 

Foreign investors in Romania have reduced their optimism over the war, but more see Romania as a more attractive destination

Business Sentiment Index: Half of the companies will invest in 2022 at the same level as last year

FIC BUSINESS SENTIMENT INDEX: Investors affected by conflict in Ukraine, but optimistic

FIC: Moderate optimism among investors

FIC: Although affected by the war in Ukraine, our foreign investors remain optimistic

FIC: Moderate optimism among investors

The companies maintain a moderate optimism regarding the Romanian business environment. 

Klaus Iohannis says Vladimir Putin is to blame for the high inflation in Romania
President Klaus Iohannis has stated that Russian President Vladimir Putin and his war against Ukraine are to blame for Romania’s rising inflation, and that the impact is a global one. The head of state has added that the Romanian government has taken and will continue to take measures to alleviate the effects of inflation. He has also advised people to spend their money wisely. Specialists have transmitted that Romania’s annual inflation rate grew to 13.76% in April 2022.
Romania recorded the biggest increase in inflation in Europe in April
Romania recorded the biggest increase in inflation in Europe in April, to 13.8%, but the latest data on the evolution of wages show that incomes grew by more than 10% in February, which makes the rise in consumer prices seem less alarming, according to John Hardy, head of Forex analysis at Saxo Bank. Moreover, in Hungary, wages grew by 32%, right before the elections in April, and inflation is estimated at 9.5%, lower than what the Netherlands had reported in both March and April (9.7% and 9.6%), and less than what Romania is suffering in the fight against inflation, the Saxo Bank analysis also indicates.
CEOs in Romania expect economic growth to slow down
The optimism of CEOs in Romania about the evolution of Romanian economy decreased following the outbreak of war in Ukraine, according to the April revised edition of the CEO Survey 2022, conducted by PwC Romania. As a result, the percentage of those expecting national GDP growth to accelerate fell to 34% in April, from 59% in the January edition of the report, while the share of respondents expecting a slowdown in economic growth doubled, from 26% to 54%.
Patria Bank calls shareholders again to vote on the issuance of EUR 5 million bonds
The Board of Directors of Patria Bank (PBK), a credit institution controlled by the Emerging Europe Accession Fund investment fund, has reconvened shareholders on 16 June 2022, to approve the issuance of unsecured, non-convertible, subordinated bonds, through one or several RON or euro-denominated issues, worth EUR 5 million altogether, according to the notice to attend published at Bucharest Stock Exchange on Thursday. If the proposal passes the shareholders’ vote, the Board of Directors will establish the type and interest rate, the issue currency, the maturity and nominal value of bonds for each financing.
Transilvania Broker de Asigurare obtained a RON 5.2 million net profit in Q1/2022
Transilvania Broker de Asigurare (TBK), one of the biggest insurance brokerage companies on the local market, recorded a 159.6% increase in its net profit in Q1/2022, from RON 2 million in 2021, to RON 5.2 million, according to data in the quarterly report published on Bucharest Stock Exchange (BSE). The company’s turnover reached RON 36.5 million, up by 66.3% against last year’s level, of RON 21.9 million lei. On Wednesday, shortly after the start of the trading session on BSE, TBK shares were up 5.3%, on over RON 600,000 transactions. The most important category of operating expenses, represented by expenses with commissions paid to assistants, grew by 58% (RON 10 million), reflecting the increase in the volume of brokered premiums during the reporting period compared to the reference period, the report indicates.
Allianz Group ended the first three months of 2022 with EUR 44 billion total revenues
Allianz Group, present on the Romanian market through the insurance company Allianz-Tiriac, ended the first three months of 2022 with EUR 44 billion total revenues, up by 6.2% against the similar period of 2021, while its operating profit reached EUR 3.2 billion in Q1/2022, down by nearly 3% year-on-year, according to information transmitted by Allianz representatives. Allianz Group reached a net profit attributable to shareholders of EUR 600 million in Q1/2022, having recorded an over 78% decline compared to the first three months of 2021.
Agroland network has opened its 18th MEGA store in Timişoara
Agroland Business System (stock exchange symbol AG), the Romanian retail, agricultural and food entrepreneurial group that owns the largest network of agricultural stores in Romania, has announced on Bucharest Stock Exchange that it opened its 18th Agroland MEGA store in Romania. The investment in Agroland MEGA Timişoara amounted to EUR 200,000, not including stock.
FAN Courier inaugurated Cluj-Napoca regional HUB, following a EUR 14.5 million investment
On Thursday, FAN Courier inaugurated its latest investment of the past few years, the Cluj-Napoca regional HUB, a project that helps the company fulfill its mission, as promised nearly 25 years ago when Adrian Mihai, Neculai Mihai and Felix Pătrășcanu had set up the first Romanian company in this industry, according to a press release. According to the cited source, FAN Courier has invested EUR 14.5 million for the construction of the HUB in Cluj-Napoca, which is the first project in Romania which includes a solution that optimizes the courier services flow and reduces sorting and transit times. The HUB in Cluj-Napoca is the second biggest such unit owned by FAN Courier, after the one in Ștefăneștii de Jos - built ten years ago, but recently modernized.
Hagag Development Europe will build a premium residential project in Primăverii area
The Israeli from Hagag Development Europe will build a premium residential project in Primăverii area in Bucharest, which will include commercial spaces as well and which they will invest EUR 20 million into. The plan is still in the design phase, but "H Primăverii 1" will be built on a plot of land of 1,360 square meters and will provide more than 4,000 square meters of apartments and commercial spaces, plus over 2,000 square meters of underground parking spaces.
Mercedes-Benz announces major investments in Romania for electric cars
German giant Mercedes-Benz intends to develop projects in Romania in order to switch to the production of components for electric vehicles, through major investments in the following period, according to the message transmitted to the Romanian authorities. The company has received EUR 35 million state aid for the purchase of machinery. Daimler started producing the new 8G-DCT gearbox, a highly-performing automatic gearbox with latest generation technology, at its plant in Sebeș, in 2019.
Draft law banning Russian software in public institutions in Romania is up for consultation
The Ministry of Research, Innovation and Digitalization has announced that the draft law banning the use of Russian software in public institutions and by authorities in Romania has been put up for consultation. According to a press release issued by the Ministry, the presence of Russian antivirus software solutions may represent a vulnerability to the cyber security of Romanian authorities and institutions, considering that the Russian Federation is also using cyber-attacks against Western states and is using its national companies and Russian citizens, through various methods, in the war against Ukraine.
Maximum speed limit on express roads will be 120 km/h
On Thursday, President Klaus Iohannis promulgated the law increasing the maximum speed limit outside localities, on express roads, from 100 km/h to 120 km/h. The draft law signed by Save Romania Union (USR) had been adopted by Parliament on 13 April. According to the law, paragraph (4) of Article 49 is amended as it follows: "(4) Maximum speed limits outside localities are: a) on highways - 130 km/h; b) on express roads - 120 km/h; c) on European national roads (E) - 100 km/h; d) on other categories of roads - 90 km/h."
European News 
Controversy surrounds the EU Second Additional Cybercrime Protocol
While the date for the ratification of the Second Additional Cybercrime Protocol by the European Parliament is yet to be set, civil society and some MEPs have called for the opinion of the European Court of Justice over data and privacy concerns. The Second Additional Protocol to the Budapest Convention on Cybercrime was opened for signature at the Council of Europe in Strasbourg on Thursday, 12 May. It is modernizing the original convention of 2001 to adapt to the challenges of the 21st century, aiming to ensure a common and cooperative criminal policy approach. In November 2021, Ministers at the Council of Europe formally approved the Protocol. Now, after the countries’ signing on 12 and 13 May, the text needs to be given consent by the European Parliament.
The average gross wage in economy grew by 5.8% in March, to RON 3,937
The average gross wage in economy was RON 6,401 in March, RON 342 (+5.6%) higher than in February, according to data published by the National Institute of Statistics (INS) on Thursday. The average net wage stood at RON 3,937, up by RON 216 (+5.8%) against the previous month. The highest values of the average net wage were recorded in information technology service activities (including computer service activities) – RON 9,968, and the lowest ones were recorded in hotels and restaurants – RON 2,079.
42% of 1-8 grade students are illiterate when it comes to writing, reading and understanding a text
42% of 1st-8th grade students are illiterate when it comes to writing, reading and understanding a text, according to data from the National Literacy Report, which assessed the level of functional literacy skills (text writing, reading and comprehension) of children in Romania. The level of functional illiteracy in Romania has reached alarming levels, according to representatives from the Association for Values in Education and from the Brio platform, two of the entities to have drawn up the aforementioned National Literacy Report.
One in two Romanians considered emigrating following the outbreak of war in Ukraine
51% of Romanians have considered leaving Romania since the outbreak of the war in Ukraine, while 12% are waiting to see how the situation will evolve and 11% believe the war will not affect Romania, according to a survey conducted by BestJobs recruitment platform. Moreover, 26% of respondents said they would not take this step regardless of how the situation evolves. Proximity to relatives or acquaintances (27%) and distance from the war zone (24%) add to the list of reasons for relocation.