Daily Newsletter - 2 August 2022


Macroeconomic (3)
Financial (4)
Investment (3)
Legislative (2)
European News (1)
Social (3)
Unemployment rate decreased by 0.1% in June 2022, compared to the previous month
Unemployment rate decreased by 0.1% in June 2022, to 5.3%, compared to the previous month (5.4%), according to data published by the National Institute of Statistics (INS) on Monday, 1 August. The number of unemployed (aged 15-74) estimated for June 2022 was 439,900 people, lower than both the previous month (451,000 people) and June 2021 (443,300 people). By gender, unemployment rate among men was 1.2% higher than the one among women (the corresponding values being 5.8% for men and 4.6% for women).
Several amendments to the Fiscal Code entered into force on Monday, 1 August
The changes to the Fiscal Code that came into force on 1 August 2022 are the taxation of part-time employment contracts at the level of the minimum wage in economy, the increase in excise duties on tobacco and alcoholic beverages and the higher taxation of gambling winnings. Several changes regarding the provision of tax facilities in constructions and agriculture also came into force, including a reduction of the ceiling below which fiscal facilities are granted to employees in this sector. Following the new changes, the state is expected to collect about RON 1 billion extra to the state budget and RON 11 billion in 2023.
SMEs in Romania can obtain EUR 2.2 billion total financing
Romanian companies have EUR 2.2 billion available through the Operational Program for Smart Growth, Digitalization and Financial Instruments, after the European Commission (EC) approved the provision of EUR 45 billion funds through the Partnership Agreement for Romania’s Transformation on 25 July. According to a press release issued by a company specializing in IT solutions, preparing the necessary projects is the main challenge of this program, through which between EUR 30,000 and EUR 100,000 can be obtained for purchases of IT Equipment, Software and Services.
Austrian group Erste ended H1/2022 with EUR 1.1 billion net profit
Austrian group Erste, owner of BCR, ended the first half of 2022 with a net interest income of EUR 2.8 billion, up by 16% year-on-year, while the net profit attributable to the parent-company’s owners grew by 24%, to EUR 1.13 billion, according to the financial report published on Monday, 1 August. Moreover, net income from fees increased by 11%, to EUR 1.21 billion.
NBR’s foreign exchange reserves stood at EUR 42.768 billion at the end of July
The National Bank of Romania (NBR)’s foreign exchange reserves stood at EUR 42.768 billion at the end of July, up by 1.74% compared to the EUR 42.033 billion level recorded on 30 June 2022, the central bank has announced. EUR 3.315 billion inflows were recorded in July, representing changes in credit institutions’ foreign currency-denominated required reserves with the NBR; inflows into the Ministry of Finance’s accounts; inflows into the European Commission’s account and other. Moreover, EUR 2.580 billion outflows were recorded, representing: changes in credit institutions’ foreign currency-denominated required reserves with the NBR; interest payments and principal repayments on foreign currency public debt and other.
CEC Bank has increased interest rates on household and corporate deposits
CEC Bank operated several interest rate increases for household and corporate deposits, given the new market context. The new interest rates entered into force on Monday, 1 August. As a result, interest rate for 12-month RON-denominated household deposits is 7.2% per year for deposits made online and 7% for deposits made in one of the bank’s branches. Moreover, interest rate for three-month deposits is 5.7% per year online and 5.5% in the bank’s branches.
BCR recorded a net profit of RON 1.04 billion in H1 of 2022
BCR reported a net profit of RON 1.04 billion (EUR 210.7 million) for the first half of 2022, up by 50.9% compared to the RON 690.8 million (EUR 140.9 million) level recorded in the same period of 2021, thanks to the improved operating performance, supported by the continued upward trend of lending. The bank’s operating income grew by 19.6%, to RON 2.16 billion (EUR 438.7 million) and its operating profit increased by 25.2%, to RON 1.26 billion (EUR 256.4 million).
Apa Braşov SA has started a RON 271.4 million investment
Apa Braşov SA, the regional water supply and sewerage operator in Braşov County, subordinated to Braşov County Council, has started a RON 271.4 million (about EUR 54.8 million) investment, supported from European funds, for the development of the county’s water and wastewater infrastructure. The investment is only the first stage of the "Regional project for the development of water and wastewater infrastructure in Braşov County/Central Region" whose total value exceeds EUR 250 million.
Austrian group Supernova is investing in the modernization of shopping centers
Austrian group Supernova is investing up to EUR 40 million in the modernization of shopping centers acquired at the end of 2021 in Bucharest, Constanţa, Bacău and Drobeta Turnu Severin. Modernization works are already underway in Drobeta Turnu Severin and Bacău, and will be started and completed in Constanța and Bucharest by the end of 2023. Supernova Group had entered the Romanian market in November 2020, when it took over Jupiter City Shopping Center, in Piteşti, which subsequently became Supernova Piteşti in April 2022.
CFR Călători will invest over RON 291 million in repair works on railway level crossings
Romania’s national railway company, Compania Naţională de Căi Ferate CFR S.A., has selected the winning bids for lots 3 (Timişoara), 4 (Cluj) and 6 (Iaşi) within the tender procedure for maintenance and repair works on railway level crossings (8 lots). The total value of the bids submitted for the framework agreements corresponding to the three lots - 3, 4 and 6 - is RON 291,392,560, VAT not included, the necessary financing being ensured from state budget funds, according to a press release issued by CFR S.A.
MIPE wants to take over several directorates within the Ministry of Development
The Ministry of Investments and European Projects (MIPE), led by Marcel Bolos (supported by the National Liberal Party - PNL), wants to take over several directorates within the Ministry of Development, including the personnel, leaving the institution led by Cseke Attila (UDMR) without almost a fifth of its working capacity. Several days ago, the aforementioned Ministry published a draft emergency ordinance aimed at "strengthening the Ministry of Investments and European Projects’ administrative capacity to manage operational programs".
Ludovic Orban will challenge the ordinance on Fiscal Code amendments at CCR
Ludovic Orban, the leader of the Force of the Right party, stated on Monday, 1 August, that the Ombudsman would be notified this week in order to challenge the ordinance amending the Fiscal Code at the Constitutional Court of Romania (CCR). Ludovic Orban said that the normative act was an "abuse" from a procedural point of view. He also indicated that there were substantive arguments for challenging this law at CCR, pointing to the failure to observe the fair distribution of the tax burden and equality before the law.
European News 
EU and NATO urge Russia to fully implement grain deal
The European Union and NATO on Monday (1 August) welcomed the departure of a grain shipment from Ukraine as a "first step" towards easing the food crisis caused by the Russian invasion. But EU spokesman Peter Stano said Brussels still expects the "implementation of the whole deal and resumption of Ukrainian exports to the customers around the world". Separately, NATO Secretary General Jens Stoltenberg said western allies "strongly support the full implementation of the deal to ease the global food crisis caused by Russia’s war in Ukraine".
Health Minister Alexandru Rafila has announced a possible seventh pandemic wave
Health Minister Alexandru Rafila has announced that the number of COVID-19 cases in Romania will stabilize at mid-August, saying that the use of protective masks on public means of transport is essential to keep the pandemic under control. Minister Rafila has pointed out that a seventh wave of the pandemic is possible at the end of 2022.
Nearly RON 361 million has been allocated to support thermal power supply this winter
The Ministry of Development, Public Works and Administration has announced that it has allocated nearly RON 361 million to support thermal power supply during the 2021-2022 cold season and the money has been distributed to 27 localities. The largest amounts were received by Timişoara (over RON 67 million), Constanţa (over RON 61 million), Arad and Bacău (over RON 40 million each). According to the State Budget Law for 2022, the Ministry had a budget of RON 400 million to support administrative-territorial units’ activity, with a view to ensuring thermal power supply.
Nearly half of companies to resort to lay-offs will give up all part-time employees
Nearly half (47.7%) of the employers who will resort to lay-offs in the following period will give up all part-time employees, according to the results of a survey conducted by the National Council of Small and Medium-Sized Private Enterprises in Romania (CNIPMMR) regarding the impact of the new fiscal measures adopted by the Government. As to the change in micro-enterprises’ tax regime, through the reduction of the ceiling from EUR 1 million to EUR 500,000, 35.8% of respondents said that they were affected to a significant extent, 26.8% to a small extent, while 37.4% of those surveyed said they had not been affected at all.