Daily Newsletter - 16 March 2021


FIC Daily Newsletter | 16.03.2021
Macroeconomic (3) || Financial (3) || Investment (3) || Legislative (2) || European News (1) || Social (2)
Annual inflation rate is expected to gradually pick up
Annual inflation rate is expected to gradually pick up in 2021 until nearing the upper bound of the target interval, under the impact of supply-side shocks, according to a press release issued by the National Bank of Romania yesterday. The cited source added that high uncertainties and risks to the new outlook stemmed, however, from the evolution of the pandemic and of the associated restrictive measures, as well as from the dynamics of vaccination worldwide, but especially across the EU.
PNRR’s evolution was presented during PNL leadership’s meeting
National Liberal Party (PNL) leader Ludovic Orban presented the evolution of the National Resilience and Recovery Plan (PNRR) during yesterday’s meeting of the party leadership, pointing out that negotiations inside the ruling coalition continued, but he was optimistic that Romania would submit the document within the deadline established at European level. PNL president was also asked about the justification for granting a 100% bonus to the European Funds Ministry’s employees in charge of PNRR.
Number of companies that suspended their activity in January 2021 decreased year-on-year
The number of companies to have suspended their activity in the first month of this year decreased by nearly 11% compared to the similar period of 2020, to 1,063, according to data published by the National Trade Register Office (ONRC). Most companies that suspended their activity in January 2021 were from Bucharest, namely 115 (up by 26.37% against January 2020), followed by Bihor County, with 63 suspended companies (up by 21.15%), Prahova County - 44 companies (+ 15.79%) and Timiş County - 44 companies (+ 18.92%).
NBR has maintained the key rate at 1.25% per year
The National Bank of Romania’s Board of Directors decided yesterday to keep the monetary policy interest rate at 1.25% per year. Moreover, it left unchanged the deposit facility rate at 0.75% per year and the lending (Lombard) facility rate at 1.75% per year. Furthermore, the Central Bank decided to maintain the existing levels of minimum reserve requirement ratios on both RON- and foreign currency-denominated liabilities of credit institutions.
The deferral of loan instalments has not been of very much help to Romanians
The Alternative Banking Dispute Settlement Center (CSALB) has received some requests from consumers asking banks to defer instalments beyond the maximum period of 9 months, arguing that their financial situation has not improved. On the other hand, CSALB continues to receive many applications for removing consumers from the Credit Bureau - 534 such applications were received in 2020 and 112 in 2021 -, which is a sign that consumers want to apply for new loans and do not consider themselves affected by the Covid-19 pandemic.
Retail investors purchased EUR 103 million Fidelis government bonds
Retail investors placed EUR 103 million equivalent orders for the three government bond issues within the Fidelis program, four days before the closing of public offerings (19 March). The securities will be subsequently traded on Bucharest Stock Exchange (BVB). Interest seems to be slightly lower than the one recorded in the previous session of offers, due to the lower promised interest rates as well. However, most subscriptions are often made on the last day (in order not to keep one’s money blocked).
REHAU is investing EUR 10 million in a regional hub in Sibiu
REHAU, a German supplier of window solutions, installations and furniture, wants to expand its activity in Romania and Eastern Europe. It has therefore decided to build a regional hub in Sibiu to cover the market and clients more easily, but also to be closer to European roads. After the EUR 10 million construction is finalized, REHAU will give up its current units in Tunari and Apahida and will relocate its headquarters to Bucharest and Cluj.
Wallberg has finalized 134 apartments in the first residential tower in Timişoara
Wallberg developer from Arad has finalized the first 15-storey residential tower with 134 apartments part of the XCity Towers complex, developed in the northern part of Timisoara, following a EUR 12 million investment. According to the developer, all the apartments will be delivered to future residents by the end of March. Tower One has 15 floors and is currently the tallest residential building in use in the western part of the country.
European Commission has approved two major investments for Romania
The European Commission has approved two major investments for a total of EUR 357 million from the Cohesion Fund to expand and modernize the water and wastewater systems in Satu Mare and Brăila Counties in north-west and south-east Romania respectively. The projects will supply good-quality drinking water, reduce sewage leaks and improve wastewater services, while ensuring compliance with EU Directives for drinking water quality and wastewater treatment.
Taxable entities can opt for the VAT upon collection system starting from 1 March 2021
The Ministry of Finance has brought some clarifications regarding the implementation of the VAT upon collection system. Law no. 296/2020 amended the Fiscal Code provisions so that, starting from 1 January 2021, taxable legal entities whose turnover in the previous calendar year and in the current year did not exceed the RON 4.5 million ceiling should be able to opt for the VAT upon collection system starting from the first day of the tax period following the one during which they opted for the system in question.
President Klaus Iohannis promulgated a new law on retirement age for certain categories of people
Yesterday, President Klaus Iohannis promulgated the law approving Government Emergency Ordinance (OUG) 10/2020, which reduces the standard retirement age by 20 years for certain categories of people who have worked in the underground. Moreover, the Law approving OUG 84/2020 was also promulgated in order to establish certain measures necessary for the implementation of the “Support for the Underprivileged” Operational Program - POAD.
EU reaches agreement on cross-border infrastructure funding
Following lengthy and at times contentious negotiations, the European Parliament and Council agreed Thursday (11 March) on the Connecting Europe Facility, making available over €30 billion in funding for transport, digital, and energy projects. Prior to Thursday’s late-night agreement, negotiations had stalled over the allocation of funds for ‘Rail Baltica’, a major infrastructure project that would see high-speed rail link Latvia, Lithuania, and Estonia with the rest of the EU.
Romanians prefer multinational companies to working in the public sector
Most Romanians (55.8%) want to work for a private company in the following period, especially for a large one, such as a multinational, while a significant percentage of 32.6% would like to work in the public sector, according to a BestJobs survey on labor market trends in 2021. Less than 5% of respondents said they wanted to have their own company, and 7% are undecided.