The stability and predictability of the tax system must be a priority
for the authorities in order to maintain a strong and attractive
business environment. Only in these conditions will the private sector
be motivated to continue investing in our country and to provide jobs
for its citizens. Any change in the fiscal framework without impact
assessments and dialogue with the business community, could compromise
the potential for economic development, which is mainly based on
attracting foreign direct investment. As resulted from the latest FIC
Study, the taxes paid by the FIC member companies have a significant
direct contribution to supporting the State budget, the economic growth
registered in Romania, as well as to building wealth. The results show
a detailed picture of the major contribution of large Romanian
companies with foreign capital to the state budget, the most important
indicator being the level of VAT collection, which is the highest. The
report/study provides details regarding the contribution of a
representative sample of Romanian companies with foreign capital to tax
revenues through the level of taxes paid to the state budget.
The International Monetary Fund has warned Romania’s government that it
must take fiscal measures, must reform the system of taxes and charges
and increase the latter in order to bring GDP below 3% and thus prevent
the deterioration of public finances. The institution estimates 3.5% -
4.5% economic growth for Romania in 2022 and 2023. An IMF delegation
came on a visit to Bucharest during the period 30 May-10 June. The
delegation issued a statement pointing out that after a solid recovery
from the pandemic, Romania was now facing negative repercussions of the
war in Ukraine and rising inflation. In addition, the country is faced
with these new challenges from a weak fiscal position.
Annual inflation rate in Romania grew to 14.5% in May from 13.8% in
April, according to data published by the National Institute of
Statistics (INS) on Friday. According to the aforementioned source, the
biggest increase, of more than 86%, was recorded for natural gas.
Moreover, the harmonized index of consumer prices (HICP) - an indicator
used for calculating inflation in EU member states, was 101.22% in May
2022, compared to April 2022.
Government debt stood at 48.4% of GDP in March, according to revised
data from the Ministry of Finance, based on the latest figures
regarding the Gross Domestic Product published by the National
Institute of Statistics. The Ministry of Finance had previously
announced a government debt level of 50.3% of GDP in March. Government
debt amounted to RON 593.972 billion in March, of which the medium and
long-term debt was RON 573.58 billion and the short-term debt was RON
20.38 billion. Government securities accounted for most of this debt,
namely RON 491.553 billion. Moreover, loans totalled RON 91.688
The 10-year interest rate paid by the Romanian state (RO10Y) rose
sharply on Friday, 10 June after the publishing of inflation figures,
to 8.4%, a record high of the past 13 years. The 10-year interest rate
is the benchmark cost including for financing the economy. Romania is
already borrowing at the highest rate in Europe, with the National Bank
of Romania (NBR) even intervening regularly on the secondary market
with purchases to reduce volatility in yields on RON-denominated
sovereign bonds as investors are reducing their exposure to sovereign
bonds at local and global level, pushing financing costs upwards. In
addition to weak demand for RON-denominated bonds due to high inflation
and to Romania’s complicated fiscal situation, the local secondary
market is illiquid, which makes a moderate sale of RON-denominated
bonds push up sovereign yields considerably.
The International Monetary Fund has called on the National Bank of
Romania to ensure enhanced exchange rate flexibility in order to
support the increase in external competitiveness and the absorption of
external shocks. The IMF has indicated that the exchange rate stability
targeted by NBR has kept inflation under control and has prevented
confidence in the national currency from deteriorating. However, this
exchange rate stability has led to a reduction of competitiveness.
Under these circumstances, a gradual increase in exchange rate
flexibility over time is necessary.
Yves Jean Guenole Lallemand’s term of office as Deputy CEO Global
Corporates at BRD-SocGen will expire on 29 June 2022. Moreover,
Stéphane Benoit Fortin, Deputy CEO, Treasury Finance, will step down as
of 1 September 2022, BRD has announced. Yves Jean Guenole Lallemand and
Stéphane Benoit Fortin are to leave the Management Board of the
Romanian bank with French capital and will be replaced by Maria
Rousseva and Étienne Jean Loulergue, respectively.
BCR, the second biggest credit institution in Romania after Banca
Transilvania, has attracted RON 702 million from major investors, such
as pension funds, mutual funds, or insurance companies, through a
RON-denominated green bonds issue, necessary for the minimum
requirement for own fund and eligible liabilities (MREL) criteria.
According to ZF information, the financing has a five-year maturity,
and the interest rate is formed of the cost of the four-year Romanian
government bonds (8.120%) plus a margin of 0.95%, which results in an
interest rate of 9.07% per year. BCR will finance green projects with
the help of this bond issue.
Regina Maria Première Hospital in Timisoara is to expand its maternity
department by inaugurating a new Neonatology section. The expansion of
the new Neonatology section in Timisoara to over 300 square meters will
increase the capacity to 6 incubators in the premature ward and 4 open
incubators in the intensive care unit, allowing the hospital to
simultaneously care for 4 critically ill newborns and 6 premature
newborns requiring special care and treatment. More than 3,200 births
were safely managed during the COVID-19 pandemic.
E-kid Furniture, which manufactures children’s furniture and owns a
plant in Sebeș, Alba County, came from France in 2000. In 2019, the
company was taken over by Guillot Sylvain Pierre. In 2022, the company
will open a new unit, where it plans to reach 40 employees and wants to
implement a buy-back system through which used furniture is refurbished
and subsequently sold to other customers.
Romanians will be able to open a free bank account for basic services -
pension or salary, electronic payments or savings, if the draft law
announced by MP George Tuță on Thursday is implemented. MP George Tuță
announced on Thursday, during the "Financial Education Forum", that he
would continue to develop, through a new legislative initiative, the
Romanians’ financial inclusion process.
On Thursday, 9 June, the Government adopted an emergency ordinance on
some measures for filling vacant and temporarily vacant public
positions with attributions in the implementation of Romania’s National
Recovery and Resilience Plan. To be more exact, the framework for fast
contests will be created, and the average period for filling a position
will be 13 days, instead of 51 days.
Several senators from the National Liberal Party (PNL) and from the
Social Democratic Party (PSD) have submitted to the Romanian Senate a
draft law amending Law 289/2009 on the Criminal Code and Law 130/2010
on the Criminal Procedure Code. The draft law provides for increasing
the age of sexual consent and separately criminalising the offence of
rape of a minor and assault. The draft law also stipulates, in the case
of child pornography, that "the act of an adult requesting a minor to
record, produce, distribute, exhibit or transmit by any means,
including electronic means of communication shall be punishable with
imprisonment for 6 months to 5 years".
The Romanian government wants to transform the country’s energy
infrastructure and energy mix to attain energy independence, but
experts warn there are still issues while environmental groups call for
a bigger role for renewables. Last year, 45% of Romania’s primary
energy consumption was provided by imports, according to the country’s
National Institute of Statistics. The country relies on Russian imports
for 29% of its gas consumption and a quarter of its imported fuel,
according to the Intelligent Energy Association in Romania. Transgaz,
the Romanian natural gas transmission system operator, said that annual
consumption varies between 11-12 billion cubic meters (bcm) and could
increase by another eight billion annually.
11,116 babies were born in April 2022, 2,155 fewer than in March 2022.
The number of deaths recorded in April 2022 was 22,155 (11,596 men and
10,559 women), 4,059 fewer (2,208 men and 1,851 women) than in March
2022, according to data published by the National Institute of
Statistics (INS) on Friday. In 2020, the number of deaths grew
considerably in October, November and December, compared to the same
months of 2019, while in January-February 2021 the number of deaths was
lower than in the last months of 2020, yet still higher than in the
same months of the previous year.
The average net wage stood at 3,967 RON in April, up by RON 30 (+0.8%)
against the previous month and by 11.4% compared to April 2021,
according to data published by the National Institute of Statistics
(INS) on Friday. The real wage index in April 2022 was 97.9% compared
to April 2021 and 97.2% compared to March 2022. Compared to October
1990, the real wage index stood at 227.5%, 6.7% lower than the one
recorded in March 2022.