News

Daily Newsletter - 14 September 2022

Summary

FIC (2)
Macroeconomic (3)
Financial (4)
Investment (4)
Legislative (3)
European News (1)
Social (2)
FIC 
"Va Urma" report: Romania’s economy could reach RON 4,400 billion in 18 years’ time
Romania’s economy could grow almost 4.5 times within the next 40 years.  According to "Va urma" project launched by the Foreign Investors Council (FIC), Romania’s GDP could reach nearly RON 4,400 billion in 2040, in less than 18 years’ time, about 3.2 times higher than the current level. The GDP forecast by the government for 2022 stands at RON 1,370 billion.
FIC launching event of the "Va Urma" project with the participation of the Prime minister
FIC launched the 2022 edition of Va Urma (https://vaurma.ro) with the participation of the Prime Minister of Romania, Mr. Nicolae Ciuca, together with members of the Government and Parliament, international institutions, and economic leaders. The "Va Urma" project represents an economic development model with a vision for the next 20 years, updated to take account of the latest events at global level. The event was a first step in setting country directions agreed and supported by the authorities, representative international institutions, and the business environment. The participants agreed on ten long-term measures and several quick wins for boosting the future economy based on investments, energy mix, digitalization, human capital and institional capacity.

FIC launches a new edition of the project "Va urma"
FIC launches a new edition of the project "Va urma"
FIC launches a new edition of the project "Va urma"
Macroeconomic 
Foreign investments reached EUR 5.5 billion in 2022
Foreign direct investments grew by 43.7% in the first seven months of 2022, to EUR 5.5 billion, compared to EUR 3.83 billion in the same period of 2021. Romania thus remains an important destination for foreign investors, in a global context marked by strong uncertainties and volatility, according to Finance Minister Adrian Câciu. According to him, the recently adopted EUR 4 billion private investment support measures, together with the other support schemes included in the "Support for Romania" package and the individual state aid schemes the government is currently working on, reflect the continuous efforts to meet the needs of the business sector and help it overcome this complicated period.
Romania’s total external debt grew by EUR 5.81 billion in the first seven months of 2022
Romania’s total external debt - public and private – grew by EUR 5.81 billion during the period January-July 2022, to EUR 140.4 billion, of which general government debt amounted to EUR 57.1 billion, down by EUR 1.6 billion against the level recorded on 31 December 2021, according to data published by the National Bank of Romania (NBR) on Tuesday, 13 September. Of the total volume, external debt was EUR 97.5 billion and intercompany lending represented EUR 42.8 billion.
The number of insolvencies soared in the first half of 2022
The latest study conducted by Coface Romania shows that 3,510 new insolvency proceedings were opened in the first half of 2022, up by 16% against H1/2021 and 6% above the level recorded prior to the Covid-19 pandemic. Financial losses caused by insolvent companies in H1/2022 amounted to RON 2.7 billion, up by 36% year-on-year and almost similar to the losses generated by insolvent companies in 2020.
Financial 
Trade, manufacturing and services benefited from the biggest volume of financing from BT
Trade, manufacturing and services are the sectors to have benefited from the biggest volume of financing in Banca Transilvania’s corporate loans portfolio. The cumulative balance of loans granted to the three areas stood at RON 13 billion at the end of H1 of 2022, up by 12% against the level recorded at the end of 2021. The volume of the financing granted by Banca Transilvania for trade, manufacturing and services represents about 20% (one-fifth) of the bank’s total net loans balance.
Raiffeisen Bank to launch a new edition of the Startup Studio by Factory program
On 7-26 November, Raiffeisen Bank is to carry out a new edition of the Startup Studio by Factory program, through which entrepreneurs who have recently entered the world of business learn how to launch new products or services and adapt to market requirements. Those interested can sign up for the free entrepreneurial education module during the period 13 September - 31 October. The program is carried out in partnership with Impact Hub Bucharest.
BRD Asset Management launched four new investment funds
BRD Asset Management, BRD - Groupe Societe Generale’s company which specializes in investment management, has recently launched four new investment funds, having thus expanded its investment product portfolio by 50%. Two of the four products are Target Date Funds, a novelty on the local market. The new funds are called BRD Orizont 2035, BRD Orizont 2045, BRD Oportunităţi and BRD Euro Simplu and join the eight other funds the company already manages.
The current account deficit grew to EUR 14.9 billion in the first seven months of 2022
The current account deficit grew to EUR 14.9 billion in the first seven months of 2022, compared to EUR 9.1 billion in January-July 2021, as international trade in goods reached a nearly EUR 18 billion deficit, according to NBR data. The goods balance thus had a EUR 5.29 billion higher deficit at the end of June than in the same period of 2021. In contrast, the balance of services recorded a EUR 1.65 billion higher surplus, of nearly EUR 6.7 billion, after the transports sector reported a EUR 3 billion surplus, and the telecommunications, computer and information services registered a EUR 2.9 billion surplus. However, tourism still generated a EUR 1.5 billion deficit, EUR 500 million above the level reported for July 2021.
Investment 
Superball SRL to invest nearly EUR 3 million in the modernization of its production lines
Superball SRL is to invest nearly EUR 3 million in the modernization of its production lines by launching the project "Greening SUPERBALL production line through innovative textile products, automation and by improving circular economy processes". The mission of Superball SRL, a member company of GREEN FUTURE GROUP, owner of brands such as Mezoni, Green Future, Bedora, Essience, Bebeluca and others, has always been to create a unique shopping experience for its customers and to manufacture products that bring them closer to the lifestyle they want.
Lockheed Martin has announced it will invest in Romania
Prime Minister Nicolae-Ionel Ciucă received, at Victoria Palace, Lockheed Martin’s delegation, led by the Vice President for International Affairs, Ray Piselli. The launch of the US company’s investment in Romania in the field of research and development in artificial intelligence was announced during the dialog, which focused on the development of bilateral cooperation. The results of the research to be carried out within the collaboration between Lockheed Martin’s Science, Technology and Engineering Research and Leadership Laboratory and the Technical University of Cluj-Napoca will be applied in the fields of national security and environmental sciences.
Giant Ericsson plans to build a large-scale 5G device factory in Romania
Swedish group Ericsson, one of the world’s largest global suppliers of equipment and services for communications operators, plans to build a factory in Romania where 5G devices will be manufactured, the size of the two antenna factories bought from Kathrein. This will be the first production unit developed by the Swedes from scratch on the local market. Ericsson is now looking for build-to-suit solutions on the real estate market for an approximately 30,000 square metre space necessary for a new factory to manufacture radiant systems based on 5G technology.
Galaţi City Hall will build an underground car park
Galaţi City Hall will build an underground car park with a capacity of over 160 spaces at one of the most important medical units in the city. Authorities have recently announced that the public procurement contract for the "Modernization of the park and underground parking of <<Sf. Ioan>> Children’s Hospital - design and execution" has been put out to tender. The estimated value of the investment is RON 29,285,011, VAT not included, and the deadline for submitting bids is 11 October 2022.
Legislative 
Draft law amending the Recovery and Resilience Facility legislation has been modified
MEP Siegfried Mureșan, from the National Liberal Party (PNL), has announced that he has submitted, as co-rapporteur of the European Parliament, the draft report on amending the European legislation on the Recovery and Resilience Facility. The mechanism, worth EUR 700 billion, is the largest investment instrument ever adopted at European level and was set up in 2021 to help EU overcome the crisis generated by the COVID-19 pandemic and to strengthen European economies, the MEP has indicated.
Project to ensure seats for women in Boards of Directors has been finalized
Family Minister Gabriela Firea has announced that she has finalized an important project to support gender equality, ensuring seats for women in state-owned companies’ Boards of Directors. Gabriela Firea has also indicated, among other things, that three out of ten Romanians say that women do not have leadership skills, but women will prove that they can do more with the help of this project.
OUG on increasing the energy performance of residences has been adopted
On Tuesday, 13 September, the Chamber of Deputies adopted the draft law amending and completing Government Emergency Ordinance (OUG) 18/2009 on increasing the energy performance of blocks of flats. The law will now be sent to promulgation. The legislative interventions aim to update the legislation on energy performance in relation to technical, economic and environmental requirements aimed at increasing the percentage of green buildings, considering that the European Union plans to decarbonize buildings by 2050.
European News 
EU approves EUR 1.5 billion aid scheme for large electricity consumers in Romania
The European Commission approved a scheme to partially compensate energy-intensive companies in the context of increased electricity prices. The scheme has a total budget of EUR 1.5 billion to cover part of the higher electricity prices arising from the impact of carbon prices on electricity generation costs incurred between 2021 and 2030. The support measure is aimed at reducing the risk of ‘"carbon leakage", where companies relocate their production to countries outside the EU with less ambitious climate policies, resulting in increased greenhouse gas emissions globally, the Commission said.
Social 
Average number of pensioners decreased by 21,000 in Q2/2022
The average number of pensioners in Romania was 5,003,000 in Q2 of 2022, down by 21,000 against the previous quarter. The average number of pensioners registered in the public social security system was 4,604,000, down by 13,000 compared to Q1/2022. The average monthly pension (calculated by taking into account the sums for the pensions of all categories of pensioners - social security, disability, survivor, etc. - paid by pension houses) was RON 1,851 in Q2/2022, up by 0.3% quarter-on-quarter, according to data published by the National Institute of Statistics (INS) on Tuesday, 13 September.
40% of employees would look for another job if they had to work predominantly from the office
Four out of ten employees (40%) would look for another job if their employer asked them to work mainly from the office, and they would not want this, while 62% of employees want to work remotely to be efficient, according to a survey conducted at the end of August by an online platform dedicated to employees in Romania. Data compiled by Undelucram.ro shows that around a third (33%) of the HR specialists surveyed said that employees worked from the office two days a week in the companies they represented.