Daily Newsletter - 2 May 2022


Macroeconomic (4)
Financial (4)
Investment (3)
Legislative (3)
European News (1)
Social (3)
Erste Group lowers economic growth forecast for Romania from 3.2% to 2.8%
On Friday, Austrian group Erste, owner of BCR, published a report on the evolution of economies in Central and Eastern European (CEE) countries, estimating 2.8% GDP growth for Romania at the end of the year, lower than the projection made before the outbreak of the military conflict at the border, when the institution had forecast 3.2% economic growth. Romania ranks third in the top of estimates regarding economic evolution in CEE countries, after Hungary, which is expected to record 4.8% GDP growth this year, and Austria, where a 3.5% advance has been estimated.
The general consolidated budget deficit grew by 65% in March
The general consolidated budget deficit grew by 65% in March compared to the first two months of the year, to nearly RON 16 billion (1.19% of GDP). The increase in the budget deficit occurred amid a slowdown of state budget revenues: while revenues rose 28% in the first two months, the advance decreased to +21% at the end of the first three months of the year. Moreover, expenditure accelerated, according to the budget execution.
Euro area inflation reached a record high in April
Euro area inflation reached a record high for the sixth month in a row, raising new questions about how the European Central Bank will react. Inflation in the 19-member region that uses the single currency increased to 7.5% in April, according to Eurostat’s preliminary estimates. In March, inflation had stood at 7.4%. On Thursday, European Central Bank (ECB) Vice-President Luis de Guindos tried to reassure lawmakers about the rising prices, saying the euro area was close to reaching the peak of inflation.
Romania could face an unprecedented economic crisis
Romania could face an unprecedented economic crisis, and the Government has also confirmed the worst fears. According to Antena 3, the Government announced a major economic crisis in an official report. Romanians will no longer have money to buy many goods. To be more exact, the cited source indicates that consumption will slow down considerably by the end of the year. The report clearly shows that those whose salaries or pensions had been increased were left with RON 0 more in their pockets because of inflation, which cancelled any increase.
Ministry of Finance plans to borrow RON 2.73 billion in May
The Ministry of Finance (MF) plans to borrow RON 2.4 billion from commercial banks in May 2022, of which RON 200 million through an issue of discount treasury bills and RON 2.2 billion through eight issues of government bonds. The sum of RON 330 million through additional sessions of non-competitive bids corresponding to bond auctions can add to all these. The total amount, of RON 2.73 billion, is RON 675 million below the RON 3.405 billion planned in April and will be used to refinance public debt and finance the state budget deficit. According to the prospectus published in the Official Gazette of Romania, MF has scheduled an auction on 12 May for an issue of discount treasury bills worth RON 200 million, due on 29 March 2023.
Erste ended the first quarter of 2022 with a net profit of EUR 448.8 million
Austrian group Erste, owner of BCR, ended the first quarter of 2022 with EUR 448.8 million net profit attributable to owners of the parent-company, up by 26.3% against the EUR 335.1 million result obtained in Q1/2021, while operating income grew by 11.3% to EUR 2.03 billion, according to Erste’s quarterly report published on Friday. The group’s total assets stood at EUR 325.6 billion on 31 March 2022, up by 6.78% year-on-year and by 5.9% compared to 31 December 2021. Moreover, the group’s operating profit increased by 10.4% compared to Q1/2021, to EUR 801 million.
BCR ended Q1/2022 with a net profit of RON 477.5 million
Banca Comercială Română (BCR) group, controlled by Erste Group, ended Q1/2022 with a net profit of RON 477.5 million (EUR 96.5 million), up by 12.5% against the RON 424.6 million (EUR 87.0 million) level recorded in Q1/2021, thanks to an improved operating performance supported by the constant advance of lending. The operating result grew by 20.8%, to RON 588.5 million (EUR 119.0 million) in Q1/2022, from RON 487.1 million (EUR 99.8 million) in Q1/2021, amid the higher operating income, partially compensated by higher operating expenses, according to data from the quarterly report released by bank officials.
BCR supports customers in creating value and making smart financial choices
The total portfolio of net loans granted by Banca Comercială Română (BCR) grew by 13.9% year-on-year on 31 March 2022, according to a press release. BCR provided RON 2.4 billion new loans to individuals and micro-enterprises in Q1 of 2022, up by 23% against the similar period of 2021, amid a 39% increase in mortgage loans and a 35% advance of consumer loans. The stock of RON-denominated mortgage loans rose by 17.5% year-on-year, while the stock of consumer loans (including credit cards and overdrafts) was up 11.1% on 31 March 2022, compared to Q1/2021.
IT Genetics has expanded to Spain
IT Genetics, a company with 100% Romanian capital and a hardware and software solutions suppliers for the DC/POS (data collection and point of sale) market, has consolidated its position on the external market by opening its third international office, this time in Madrid, Spain. In Spain, the company sells a wide range of hardware and software solutions required in digitalization processes, with extensive applicability and proven efficiency in work processes in multiple industries: retail, e-commerce, pharmaceutical, manufacturing, logistics, transport or HoReCa. Moreover, IT Genetics Spain offers a wide range of smart solutions that can be implemented in the work processes of public institutions.
Ministry of Finance announces Romanians can invest in Tezaur government securities in May
Romanians can invest in TEZAUR government securities, with one- and three-year maturities and annual interest rates of 5.5% and 6.15% starting from Monday, 2 May. The government bonds have a nominal value of RON 1, according to the Ministry of Finance. Moreover, the government securities issued under the Tezaur Program are transferable and can be redeemed in advance. An investor can make one or several subscriptions within an issue. Investors can cancel subscriptions already made only during the subscription period, by submitting a request.
Retailer Penny opened two stores in Sibiu and Livezeni
Penny continues its expansion plan by opening two new stores in Sibiu and Livezeni, the metropolitan area of Târgu Mureș, the company has announced. The store in Sibiu, Sibiu County, has a sales area of 799.3 square meters. The store has 38 parking spaces, two of which are for people with disabilities. Penny aims to reach 600 stores by 2029. As to logistics, the company inaugurated its fourth warehouse in Filiași, Dolj County, at the end of last year.
Chamber of Deputies has adopted a new draft law
Last week, the draft law amending the legislation on the public pension system by extending the list of localities where residents can retire early without being penalized received the decisive vote of Deputies. To be more exact, the draft law PL-x 111/2022 was adopted by the Chamber of Deputies on 27 April 2022. Legislative proposal no. B545, registered in the Senate on 25 November 2021, had been adopted by the Senate on 7 March 2022.
Romania’s Senate tacitly adopted an anti-LGBT law
The Romanian Senate has tacitly adopted a draft law that restricts the rights and freedoms of LGBTI communities, submitted by seven MPs from the Democratic Union of Hungarians in Romania (UDMR). The initiators of the draft law claim that traditional values based on Christianity are endangered. Specifically, the draft law tabled by UMDR provides for "children’s protection against the dissemination by any means of content concerning deviation from the sex established at birth or the popularization of gender reassignment or homosexuality".
Zero-emission cars will get green numbers
According to a joint order of the Minister of Environment, Waters and Forests, of the Home Affairs Minister, of the Minister of Transport and of the Deputy Prime Minister, license plates containing green letters and numbers will be issued to zero CO2 emission vehicles (100% electric or hydrogen fuel cell cars) exclusively. The new measures will enter into force 60 days after the Order’s publishing in the Official Gazette of Romania. In the case of already registered cars which meet the criteria for the provision of "green license plates", they can be exchanged, upon request, after the provisions of the normative act have entered into force.
European News 
First Ukrainian corn cargo leaves Romanian Black Sea port
A cargo carrying over 71,000 tons of Ukrainian corn finished loading in the Romanian Black Sea port of Constanta on Thursday (28 April), the first since Russia invaded Ukraine on 24 February, the manager of port operator Comvex said. With Ukraine’s sea ports blocked since the war started more than two months ago, the world’s fourth-largest grain exporter has been forced to send shipments by train via its western border or through its small Danube river ports into Romania.
Romania is the EU country with the lowest share of absences from work
Romania is the European Union country with the lowest share of absences from work, having recorded an only 2.5% rate in Q3/2021. Even if, when compared to the European average, Romania has a low work absenteeism rate, this means hundreds of thousands of euro losses for large companies with more than 300 employees. For example, a large company can lose over EUR 200,000 per year due to absences from work.
War-generated labor market crisis will affect vulnerable people
Labor Minister Marius Budăi has stated that after two years in which the International Workers’ Day had been overshadowed by restrictions imposed due to the pandemic, this year’s 1 May the holiday was marked by the effects of the war in Ukraine. He has added that Romanians are witnessing the destruction of tens of hundreds of thousands of jobs, businesses and lives. The same as the pandemic crisis, the labor market crisis caused by the war will affect the most vulnerable persons the hardest, the Labor Minister has added.
Unemployment rate in Romania stood at 2.64% at the end of March
Unemployment rate in Romania stood at 2.64% at the end of March, down by 0.03% against the previous month and by 0.69% year-on-year, according to a press release issued by the National Employment Agency (ANOFM). The total number of unemployed at the end of March 2022 amounted to 230,288 people, 2,587 fewer than at the end of the previous month. Of the total registered unemployed, 45,928 benefited from unemployment benefits and 184,360 did not receive such benefits. The number of unemployed with benefits decreased by 5,723 persons and the number of unemployed without benefits increased by 3,136 persons compared to the previous month.