A vital criterion for
large investors remains the stability, predictability, and transparency
of the legislative framework, as also highlighted by the latest edition
of the Business Sentiment Index (BSI) published by the Foreign
Investors Council. This criterion was not met for the measures taken by
Romania in the energy domain, most of them being adopted in 2022
through emergency ordinances without the necessary time to consult with
the parties involved. Although important market players are making
major efforts to adapt to new regulations, compliance and
implementation are becoming increasingly burdensome given the tight
deadlines, multiple changes over the past year and imperfections in the
legislation, and thus the functioning of the market is affected. FIC
reiterates the need for a predictable legislative framework and
consultation with the business environment to reach the best solutions
to ensure energy security, protecting vulnerable consumers and the
viability of all actors involved in the energy sector, and at the same
time, member companies’ openness for dialog with state authorities to
provide analyses and the expertise of professionals from private
sector. We continue to be the partners of the Government in identifying
sustainable measures to overcome the energy crisis, but also to ensure
Romania’s economic development.
Two-thirds of private and public sector chief economists surveyed by
the World Economic Forum (WEF) in Davos expect a global recession in
2023, the event’s organizer announced on Monday, as business
representatives and government officials gathered for the annual event
in the Swiss ski resort. About 18% of those surveyed consider a global
recession is "extremely likely", more than twice as many as in the
previous survey, conducted in September 2022. On the other hand, only a
third of respondents think a recession is unlikely this year.
The International Monetary Fund (IMF) warned on Sunday, 15 January
2023, that severe fragmentation of the global economy after decades of
increasing economic integration could reduce global economic output by
up to 7%, but the losses could reach 8-12% in some countries. Even
limited fragmentation could cancel 0.2% of global GDP, but more work is
needed to assess the estimated costs to the international monetary
system and the global financial safety net (GFSN). Global flows of
goods and capital stabilized after the global financial crisis of
2008-2009, and a surge in trade restrictions was seen in subsequent
years.
The latest data on inflation gave investors more confidence to adopt a
riskier approach, according to a press release. As a result, global
markets have recovered some of last year’s losses. But 2023 still poses
some risks related to the economic and geopolitical situation arising
from what happened in the previous year. According to the cited source,
the latest data on annual inflation in Romania for December 2022 shows
a slight deceleration, to 16.4%. However, prices still grew by 0.4%
month-on-month. 2022 was a year of high inflation, with a 1.3% average
monthly price increase, compared to 0.7% in 2021.
The head of the National Agency for Fiscal Administration (ANAF),
Lucian Heiuș has announced that the budget deficit at the end of 2022
was the one estimated at the beginning of the year, namely 5.84%,
pointing out that the institution he coordinates collected over RON 60
billion, compared to 2021. The specialist has also said that 2023 is a
rather complicated year, with a lot of external factors that may
influence the economic environment and the economic sector’s activity
in Romania. Lucian Heiuș is certain that if the fiscal and economic
policy is wise and prudent, Romania will manage to get through 2023 and
stay within the deficit of 4.4% of GDP.
UniCredit Bank, part of the Italian group UniCredit, listed the first
corporate bonds issue of 2023 on Bucharest Stock Exchange, worth RON
488.5 million, on Monday, 16 January 2023. The bonds will be traded on
the Regulated Market of Bucharest Stock Exchange, under the stock
exchange symbol UCB27. UniCredit Bank issued and sold to ten legal
entities a number of 977 senior unsecured corporate bonds with a
nominal value of RON 500,000 and maturity on 21 December 2027. The
offer was brokered by Alpha Bank.
On Monday, 13 January, the Ministry of Finance borrowed RON 2.2 billion
from banks through an auction of government bonds with a nominal value
of RON 500 million, maturing in February 2032, at an interest rate of
7.68% per year. Eight primary dealers participated in the auction.
Total demand amounted to RON 2.56 billion, of which banks bid RON 2.49
billion on their own behalf. The coupon rate was 6.7% and the yield to
maturity for the average auction price was 7.67%.
Sergiu Oprescu, the Executive President of Alpha Bank Romania and
General Manager of Alpha Bank Group International Network, has been
elected Vice President of the European Mortgage Federation (EMF). In
this position, Sergiu Oprescu will collaborate with the newly elected
President, Roberto Colomer Blasco, and with the other members of the
EMF’s Executive Committee. This is the first time an Eastern European
representative has been elected to the European Mortgage Federation’s
leadership.
Maxagro Group, owned by brothers Ianco and Ioji Zifceak, which grows
cereals conventionally on 10,000 hectares and organically on 1,800
hectares in Timis County, plans to invest EUR 10 million in irrigation
systems and a feed factory in 2023. Ianco Zifceak, a shareholder of
Maxagro, has stated that RON 50 million had been invested in technology
and machines in 2022.
German carmaker Bayerische Motoren Werke (BMW) is planning a new major
investment in the central Mexican state of San Luis Potosi, where the
company already has a plant, Mexican Foreign Minister Marcelo Ebrard
said Friday. A day earlier, Ebrard and President Andres Manuel Lopez
Obrador had said BMW was investing around EUR 800 million (USD 866.64
million) in San Luis Potosi, without specifying whether it was a new
outlay in Mexico.
On Sunday, 15 January, Energy Minister Virgil Popescu discussed with
representatives of Masdar and Taqa, about investments in renewable
energy production and the development of energy transport
infrastructure. He told the two companies’ representatives that he
encouraged them to make investments in the field of gas-based energy
production. He pointed out that Masdar representatives were already in
technical talks with Hidroelectrica representatives with a view to
investing in renewable energy production.
The latest meeting of the Senate’s Standing Bureau decided that the
draft law on the reform of special pensions would be debated within an
urgent procedure, which would shorten some deadlines, such as the one
for notifying the Constitutional Court of Romania (CCR). After having
delayed the draft law on special pensions, which passed the Government
in the last days of 2022, the Ruling Coalition requested, and the
Standing Bureau of the Senate agreed with the urgent procedure
regarding the draft law. As a result, some deadlines will be much
shorter than in the normal procedure. For example, in the case of a
referral to CCR by those discontented with the form the special pension
law, the deadline for challenging it is just two days, not five days as
in the normal procedure.
The acceptance of electronic payments by more merchants from 2023
onwards, thanks to the new provisions of the Cashback Law, responds to
consumers’ growing demand for digital services and will contribute both
to increasing financial inclusion through the development of e-payment
infrastructure in rural areas and small towns, and to combating the
underground economy. On 16 November 2022, the Chamber of Deputies, as
the decision-making body, adopted the Law approving Government
Ordinance 16/2022, which amends the current legislation on the
introduction of modern payment systems, known as the Cashback Law.
The executive vice-president of the European Commission, Margrethe
Vestager, on Friday (13 January) proposed a ‘"Temporary Crisis and
Transition Framework" for state aid. If implemented, the framework will
allow member states to more easily subsidise renewable energy
technologies and to implement tax breaks for companies in strategic
sectors that are at risk of diverting investments to third countries
outside Europe. Vestager outlined her proposal in a letter sent to EU
member state finance ministers on Friday (13 January) ahead of the
ministers’ meeting on Monday and Tuesday in Brussels.
According to Eurostat data, the unemployment rate in the euro area was
stable in November 2022, at 6.5% of the labour force, after having
reached a record low in October 2022. Compared to the situation in
November 2021, the unemployment rate decreased by 0.6%, thanks to the
post-Covid economic recovery. This indicator reached its lowest level
since Eurostat started publishing statistics in April 1998. The
European Statistical Office’s data are based on the definition of
unemployment used by the International Labour Organisation (ILO), which
defines the unemployed as those who have been actively looking for work
in the last four weeks and are available to start work in the next two
weeks.
20,344 deaths were recorded in November 2022 (10,558 men and 9,786
women), 1,151 fewer (694 men and 457 women) than in October 2022,
according to data published by the National Institute of Statistics
(INS) on Monday, 16 January 2023. By main cause of death, the most
deaths in November 2022 were due to circulatory system diseases (11,152
people, accounting for 54.8%), tumors (3,797 people, accounting for
18.7%) and respiratory system diseases (1,696 people, accounting for
8.3%). Moreover, 13,205 babies were born in November 2022, 1,930 fewer
than in October 2022.