News

Daily Newsletter - 19 November 2021

Summary

Macroeconomic (4)
Financial (4)
Investment (2)
Legislative (2)
European News (1)
Social (3)
Macroeconomic 
The share of agriculture in GDP has decreased almost five-fold over the past 25 years
The share of agriculture in the Gross Domestic Product (GDP) has decreased almost five-fold over the past 25 years, to about 4% in 2020, according to data provided by the National Institute of Statistics and the European Union’s statistical office, Eurostat. The evolution is normal considering that, as economy is growing and is going from an undeveloped to a developing one, the share of agriculture decreases and that of industry increases. However, these figures do not indicate that this sector is not a basic pillar for the Romanian economy; on the contrary, industry analysts and executives talk about agriculture’s huge development potential.
The 100 most valuable companies in Romanian economy have been valued at almost EUR 120 billion
The 100 most valuable companies in the Romanian economy have been valued at almost EUR 120 billion this year, a record level that was reached in a completely atypical period, marked by the COVID-19 pandemic which has been affecting an entire world for more than a year and a half. This is the first time - in the 16 years since Ziarul Financiar started publishing the "Top 100 Most Valuable Companies in Romania" yearbook - when these players, coming from various sectors such as energy, constructions, retail or technology, have been evaluated at over EUR 100 billion. As a comparison, the best previous evaluation dated from 2007 - one of the last years of economic boom before the financial crisis – and stood at EUR 96 billion.
Turnover from market services provided mainly to enterprises grew in the first nine months of 2021
Turnover from market services provided mainly to enterprises, in nominal terms, grew by 17.3% as a gross series and by 16.9% as a working days and seasonally adjusted series during the period January – September 2021, compared to the first nine months of 2020, according to data published by the National Institute of Statistics (INS) on Thursday. The overall turnover from market services rendered mainly to enterprises, in nominal terms, increased by 4.4% as a gross series, and decreased by 1.1% as a working days and seasonally adjusted series in September 2021 month-on-month.
Global debt decreased by USD 300 billion in Q3/2021
Global debt decreased by USD 300 billion in Q3/2021 compared to the previous quarter, to USD 296 trillion, and the debt-to-GDP ratio fell by 3.1%, to 350%, according to the latest Global Debt Monitor (GDM) report issued by the Institute of International Finance (IIF). Compared to the similar period last year, global debt grew by USD 15.9 trillion, while global Gross Domestic Product only increased by USD 5.9 trillion, to USD 84.6 trillion. The share of global debt in global GDP reached an all-time high of 361% in Q1 of 2021.
Financial 
Allianz-Ţiriac and UniCredit Bank launch life insurance policy whose price starts from RON 10/month
Allianz-Ţiriac and UniCredit Bank have launched a life insurance policy whose price starts from RON 10 per month, available to clients who have a current account in RON opened at UniCredit Bank. The new product, called Umbrella, targets clients aged maximum 69 upon concluding the policy and is structured in four packages with progressive coverage. All packages offer financial protection in case of death or disability and take over medical expenses in case of surgical interventions.
Constantin Mareş has been appointed Deputy CEO of OTP Bank Romania
Constantin Mareş, IT, PMO & Transformation Office Executive Director at OTP Bank Romania, has been appointed Deputy CEO and will coordinate the new Digital Division, created within the bank’s local development strategy. His management objectives include stimulating performance, boosting the innovative internal environment, while creating an optimal working environment for professional development and including OTP Bank Romania into the elite of the most popular employers in Romania, OTP Bank Romania officials have indicated.
Raiffeisen Bank has resumed the provision of New Home loans
Raiffeisen Bank has resumed the provision of New Home loans, after the National Credit Guarantee Fund for Small and Medium-Sized Enterprises (FNGCIMM) supplemented the sums allocated as guarantees. Clients can opt both for the housing loans that the bank offers outside the program, and for the New Home loans. The additional amounts allocated by FNGCIMM as guarantees can be used until 31 December 2021 inclusively, and clients can request the issuance of guarantee promises with up to 18 month validity, where applicable.
Omniasig reached RON 1.1 billion gross underwritten premiums in the first nine months of 2021
Omniasig, the biggest company in the local portfolio of the Austrian group Vienna Insurance Group (VIG), ended the first nine months of 2021 with a RON 1.1 billion volume of gross underwritten premiums, up by 15% year-on-year, according to the information transmitted by company representatives. Moreover, Omniasig recorded a RON 40 million gross profit at the end of September 2021, down by 28.6% compared to the similar period of last year. The compensations paid from the beginning of the year until September amounted to nearly RON 700 million.
Investment 
Berkshire Hathaway invests USD 574 million in a retailer
Warren Buffett’s investment giant Berkshire Hathaway has eliminated its investment in the pharmaceutical group Merck and has reduced its stakes in research company AbbVie and in biopharmaceutical company Bristol-Myers Squibb, according to MarketWatch. Berkshire has also eliminated it small stakes in Organon, a company specializing in contraception and other women’s health products, and in Liberty Global telecommunications group. The giant has thus disclosed USD 475 million investments in Royal Pharma, which buys royalties in the pharmaceutical industry, and a USD 99 million investment in flooring retailer Floor & Decor Holdings.
Metrorex has launched the tender for Băneasa - Otopeni Airport section
The Ministry of Transports has launched the tender for the extension of the M6 metro line from Tokyo (Băneasa) to Henri Coandă Airport. The about EUR 500 million tender only targets the design and execution of structural frames, and other contracts will subsequently be concluded for equipment, railway track, finishes and trains. The move comes despite a devastating report on the project issued by external experts during Cătălin Drulă’s term. The report showed that the project’s profitability was far from an acceptable level, and the project, in its current form, also had several other major problems: a high cost, its being doubled by the current rail line North Train Station-Airport and the construction of a new main terminal of the Airport that the current M6 line would not get to.
Legislative 
Labor Minister Raluca Turcan has initiated a draft government decision
Labor Minister Raluca Turcan has initiated a draft government decision so that Monday, 29 November 2021, should be a non-working day and a bridge can thus be created with the public holidays 30 November and 1 December, which fall on Tuesday and on Wednesday. Once the necessary reports have been issued on the draft government decision, the latter needs to be adopted in a government meeting. Romanians could thus have an extended weekend to start on 27 November.
A legislative proposal regulating RCA tariffs was submitted to the Senate
A legislative proposal banning companies that sell mandatory civil liability car insurance (RCA) policies from exceeding the Financial Supervisory Authority (ASF)’s reference tariffs has been submitted to Senate this week. The legislative proposal number B536/2021 completing and amending Law no. 132 of 31.05.2017 regarding mandatory civil liability car insurance for prejudices caused to third parties through vehicle and tramway accidents, submitted to the Senate on Tuesday, 16 November 2021, aims to solve the problems reported on the RCA insurance market.
European News 
Interim Energy Minister Virgil Popescu made several statements about the natural gas crisis
The natural gas crisis is an artificial crisis created by the Russian Federation, through Gazprom, Romania’s interim energy minister Virgil Popescu told a business conference on Wednesday. All EU member states need to put on a united front to end the current energy crisis, the minister also said. It was not the first time when the energy minister accused Russia of being behind the gas crisis. Back in October, Popescu said Romania had enough reserves for the winter season, adding that Gazprom provoked the increase in the price of natural gas. The minister said Gazprom reduced its deliveries to Europe to force a quick certification of its new pipeline, Nord Stream 2.
Social 
PSD-PNL-UDMR coalition agreed upon an increase in minimum pension from RON 800 to RON 1,000
During negotiations in Parliament, on Thursday, 18 November, the leaders of the Social Democratic Party (PSD), of the National Liberal Party (PNL) and of the Democratic Alliance of Hungarians in Romania (UDMR) agreed upon an increase in the minimum pension from RON 800 to RON 1,000. The budgetary impact for next year has been estimated at about RON 800 million. The leaders of the three parties are now discussing the last aspects of the governing program: fiscal policy and possible salary and pension increases.
Trade unions in the education sector have threatened to organize street protests
Trade unions in the education sector have threatened to organize street protests unless the Government intervenes to modify the Instruction on students’ rapid antigen saliva testing procedure by the end of this week, so that the procedure should not be performed by school employees, but with priority, by children’s parents/legal representatives. The organizations’ representatives have indicated that lately, the important decisions regarding the functioning of the education system have been taken in total contempt towards the employees in this important field of activity and towards students.
Registrations for Rabla scrapping program for electrical household appliances will start on Friday
Interim Environment Minister Tanczos Barna has announced that registrations for people who want to participate in the Rabla scrapping program for electrical household appliances will start on Friday. This session has a budget of RON 34 million. The program will be carried out in three stages: the first one for washing machines/ dishwashers and refrigerators/freezers, the second stage for TV sets, laptops and tablets and the third one for air conditioning equipment, tumble dryers and vacuum cleaners.