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.
Romania’s total external debt grew by EUR 721 million, to EUR 135.33
billion, in the first three months of 2022, from EUR 134.61 billion at
the end of December 2021, according to data published by the National
Bank of Romania on Friday. The current account of the balance of
payments recorded a EUR 4.676 billion deficit during the interval
January-March 2022, compared to EUR 2.736 billion in January-March
2021. In its structure, the balance of goods recorded a EUR 1.557
billion larger deficit, the balance of services recorded EUR 72 million
higher surplus, the balance of primary income recorded a EUR 287
million deficit, compared to a EUR 152 million surplus, and the balance
of secondary income recorded a EUR 16 million smaller surplus.
Prime Minister Nicolae Ciucă has stated that most of the measures
included the "Support for Romania" program have already been approved,
one month after the ruling coalition launched the program. More than
two thirds of the support package worth a total of RON 17.3 billion are
thus active and producing effects, according to a press release issued
by the Government. The implementation of these protection solutions for
citizens and the economy involves RON 11.5 billion financing from
national and European funds.
New orders in the manufacturing industry grew by 22.5% in the first
three months of this year compared to the same period of 2021,
according to data published by the National Institute of Statistics
(INS) on Friday. According to the official statistics, increases were
recorded in the durable goods industry (+40.7%), in the intermediate
goods industry (+40.3%), in the non-durable goods industry (+22.8%) and
in the capital goods industry (+12.2%) during the interval
January-March 2022.
Industrial production fell by 0.2% as a gross series and by 1.7% as a
working-day and seasonally adjusted series in the first three months of
2022 compared to the same period of 2021, according to data published
by the National Institute of Statistics (INS) on Friday. In March 2022,
industrial production (as a gross series) grew by 10.6% month-on-month,
following the increases recorded in the three industrial sectors:
mining industry (+12.8%), manufacturing industry (+11.8%) and
electrical and thermal power, gas, hot water and air conditioning
production and supply (+3.1%).
UniCredit and Citigroup are exploring asset swaps with Russian
financial institutions. UniCredit received several offers from Russian
financial institutions to buy its local subsidiary, including the
Interros group, owned by Vladimir Potanin, one of the wealthiest people
in Russia and an oligarch who has not been sanctioned by the United
States, Britain or the European Union, but the Italian bank rejected
the offer, according to the Financial Times. Earlier it had been
reported that Italian banking group UniCredit was in preliminary talks
to sell its Russian subsidiary after having been approached by
interested buyers, within what could be the second exit of a major
European bank from the Russian market in response to the invasion of
Ukraine.
Agricover Credit IFN, the financing division of Agricover Group,
controlled by Iranian businessman Jabbar Kanani, one of the main
players on the local agricultural market, has extended by 24 months and
increased by RON 50 million, to RON 120 million, a loan contracted from
CEC Bank in 2016. Agricover Credit IFN provides financial products
exclusively to farmers activating in the plant growing and livestock
sectors. Agricover Holding Group, which Agricover Credit IFN is part
of, has more than 1,000 employees and serves about 5,700 farmer
clients.
Coca-Cola HBC Romania Group, the biggest beverage bottling company on
the local market, with a RON 2.4 billion (about EUR 500 million)
turnover in 2020, will receive EUR 3.5 million state aid for an
investment project targeting the installation of PET flake
decontamination equipment in its plant in Ploiesti. The total value of
the investment amounts to EUR 8 million, which means that more than 40%
of it is state aid.
Sennheiser, the German audio equipment manufacturer, is increasing its
production capacity, including at its plant in Brasov, Romania. This
process also comes with an increase in the number of employees.
Following the investments, the company will facilitate the production
of automated technologies and the manufacturing of high-quality
products at Sennheiser’s headquarters in Wedemark, Germany, while
manual production as well as product testing and packaging will take
place at the plant in Brasov.
After having opened the dispatch center in Bucharest - in the AFI Lake
View building in March, this month DHL Express Romania has inaugurated
two operational centers in Constanta and Suceava, which also include
dispatch centers, equipped to the highest DHL standards. These
facilities will help improve the quality of customer services and
ensure premium working conditions for the company’s employees. The
operational centers come up with a new concept, being the first ones in
the country equipped with a reception for customers, where they can
pick up or send parcels, benefiting from parking spaces. The center in
Constanta has a total area of 865 square meters and Constanta County is
served by seven daily routes, while the investment in Suceava covers an
area of 520 square meters and delivery and pick-up operations are
ensured by 5 daily routes.
A legislative proposal for public holidays that fall on a Saturday or
Sunday to be taken from a weekday has been registered at the Senate.
This draft law stipulates that the days off will be provided by
employers. In order for this legislative proposal to enter into force,
it must be adopted by Parliament and promulgated by the President of
Romania, and subsequently published in the Official Gazette.
The Presidential Administration has announced that on Friday, President
Klaus Iohannis promulgated the law amending and completing Law 205/2004
on animal protection. The normative act increases the limits of
penalties and fines for cruelty to animals and has also been amended so
that bestiality should be considered cruelty to animals. Moreover,
animals that have been injured, maimed or subjected to bestiality, as
well as animals that do not receive enough food and water, adequate
shelter or medical treatment, are considered to be in danger, MPs also
established.
On Friday, President Klaus Iohannis signed the decree promulgating the
law which stipulates that the minimum gross wage in the agricultural
sector is RON 3,000 per month, similar to the measure currently applied
in the constructions sector, according to economedia.ro. The normative
act is part of the "Support for Romania" package. A gross minimum wage
of RON 3,000 means that employees will receive a net minimum wage of
RON 2,362. The salary is exempt from the payment of contributions to
the public health insurance system and to Pension Pillar 2 and from the
payment of income tax.
On Friday, President Klaus Iohannis promulgated the law amending and
completing the Land Improvement Law 138/2004 and amending Article III,
paragraphs (1), (1¹) and (3) of Law 269/2015 on the approval of
Government Emergency Ordinance 4/2015 amending Government Emergency
Ordinance 82/2011 regarding certain measures for organizing land
improvement activities, according to the Presidential Administration.
The normative act provides for facilitating investments in irrigation
systems from national and European funds.
As most corporate tax systems in the EU currently prefer debt financing
over equity and EU companies are highly indebted, the EU Commission
proposed the introduction of a tax allowance that should incentivize
the accrual of new equity rather than debt. To cushion the impact of
this de facto tax cut on new equity, the Commission also proposed to
reduce the tax-deductibility of excess borrowing costs.
Prime Minister Nicolae Ciucă, along with Education Minister Sorin
Cîmpeanu met, at the Government headquarters, with Romania’s Olympic
Mathematics team, who ranked first in the 34th edition of the Balkan
Mathematics Olympiad for seniors. PM Ciucă announced on Friday that the
Government would double the daily allowance for each student
participating in the national Olympiads and would significantly
increase the value of prizes for students who win the Olympiads at this
level.
Prime Minister Nicolae Ciucă has announced that the Government will
"shortly" approve the Family Start program, which will allow young
people to contract state-guaranteed loans to organize a wedding, a
christening or to buy a family car, according to a press release issued
on Sunday. The head of the Executive also indicated that another
project would follow, to allow the settlement of in vitro fertilization
procedures for families who cannot have children for medical reasons.