Daily Newsletter - 18 February 2021


FIC Daily Newsletter | 18.02.2021
FIC (2) || Macroeconomic (2) || Financial (1) || Investment (3) || Legislative (2) || Politics (2) || Social (2)
Foreign Investors Council  -  FDI Report
The FIC FDI Report provides information regarding the impact of foreign investment in our country through a detailed analysis on foreign investment flows, and how they have contributed to Romania's economic growth in recent years. As a conclusion of the second FDI Report and considering the recent data issued by the NBR which shows that FDI decreased in 2020 by 60.38% compared to 2019, the FIC considers that the Romanian authorities should add to the list of priorities the attraction of higher volumes of foreign direct investment, by increasing the absorption capacity and developing medium and long-term strategies, taking into account the economic reality. The use of FDI is favourable to long-term economic development, especially in the current context, when we face limited resources for large investment projects and the government's ability to mobilize such resources is narrowed by significant budgetary constraints.

Report on foreign investments in Romania
FIC: Foreign Direct Investment Report

Ramona Jurubiţă, FIC President: Innovation and solidarity, the pillars of 2020 
Even though 2020 was a very difficult and challenging year, it also had several positive features, according to Ramona Jurubiţă, President of the Foreign Investors Council (FIC) and Country Managing Partner at KPMG. Romania had a good economic evolution last year, under the pressure of the Covid-19 pandemic. Foreign investments halved in the first ten months of the year compared to the similar period of 2019, but this was compensated for by the increase in government investments and expenditure.

Leaders to follow Ramona Jurubita (KPMG): Innovation and solidarity, the pillars of 2020
Wholesale trade sales grew in 2020
The crisis generated by Covid 19 did not affect wholesale trade, which grew by more than 3% in 2020 year-on-year. IT and communications were the main growth drives, while sales of equipment, supplies or some agricultural products decreased.
Romania signals fiscal policy shift
Romania’s draft 2021 budget and medium-term deficit targets signal a shift from the pre-pandemic expansionary fiscal policy, Fitch Ratings says, but it is still unclear how underlying challenges to public finance sustainability will be addressed. According to Fitch, pension spending has been a particularly significant source of fiscal uncertainty in recent years, and the budget incorporates the 14% increase finalized last year (the original proposal had been for a 40% rise).
Banks rejected the payment of RON 2.27 billion cheques and promissory notes in 2020
Banks rejected the payment of RON 2.27 billion (about EUR 470 million) cheques and promissory notes in 2020, down by 30.6%, RON 1 billion respectively, against 2019. Companies’ liquidity level did not decrease last year amid the unfavorable effects of the coronavirus crisis. A deterioration of liquidity in the business sector would be the first signal of economic downturn and even the start of recession.
Miroslava attracted EUR 200 million investments
The first industrial park in Miroslava locality, Iaşi County, managed to attract 60 investors in five years, having reached EUR 150-200 million cumulated investments and a total of 2,500 employees. In the meantime, according to Executive Director Dorel Codină, there is already major interest in the second industrial park. The investments made so far for the development of the two parks amount to EUR 4-5 million.
Outsourcing company TDCX is to open an office in Bucharest
TDCX, a company activating in the business process outsourcing (BPO) industry, is to open, in Bucharest, its first office in Central and Eastern Europe and the second one in Europe, after the launch of operations in Spain, two years ago. The Singapore-headquartered outsourcing company plans to recruit over 100 specialists for its office in Bucharest in the first year of activity.
GRAMPET group is investing EUR 14 million
GRAMPET group, a private rail freight and logistics operator in Romania and Central and South Eastern Europe, has announced that it acquired the 28 hectare land where the Debrecen Vagongyar plant in Hungary is located, for EUR 6.5 million. This investment is part of an ambitious plan worth EUR 14 million which Grampet intends to invest within the next five years for the plant’s development.
Elimination of special pensions for deputies and senators was adopted by Parliament
The elimination of special pensions for MPs was adopted during yesterday’s plenary sitting of the Chamber of Deputies and the Senate. All the parties, except for the Democratic Union of Hungarians in Romania (UDMR), voted for the cancellation of these special pensions. There were 357 votes “in favor”, 0 abstentions and 0 votes “against”. The 30 UDMR MPs chose to attend the sitting, but not to vote.
The law allowing tax evaders to avoid imprisonment is constitutional
The Constitutional Court of Romania (CCR) rejected, with a majority of votes, the challenges filed by the High Court of Cassation and Justice, the Government and the Ombudsman to the law eliminating imprisonment for a certain category of tax evaders, according to a press release issued by CCR. The draft law stipulates that a fine can be imposed against persons accused of up to EUR 100,000 tax evasion who pay the full prejudice.
President Klaus Iohannis made a press statement yesterday
President Klaus Iohannis announced yesterday, in a press statement, that he had discussed with the Prime Minister, as well as with several ministers part of the Government, the projects included in the National Recovery and Resilience Plan. The head of state explained that healthcare, education and jobs would be among the priorities.
Chamber of Deputies rejected the simple motion filed by PSD against Health Minister
Yesterday, the Chamber of Deputies rejected the simple motion filed by the Social Democratic Party (PSD) against Health Minister Vlad Voiculescu. There were 140 votes “in favor”, 161 votes “against”, 1 abstention and 2 deputies did not vote. PSD had called for a secret ballot, but the proposal was rejected upon the vote in the plenary sitting. PNL, USR-PLUS and UDMR hold a majority of 169 votes compared to the 110 votes held by PSD in the Chamber of Deputies.
Ministry of Education has announced the structure of 2021-2022 school year
The Ministry of Education has announced that classes will start on 13 September and there will be two semesters, with a total of 34 weeks, in 2021-2022 school year. If classes are suspended, the curriculum will not be recovered during holidays. The Ministry has indicated that the National Students Council’s proposals were taken into account upon establishing the school year structure.