News

Daily Newsletter - 2 November 2021

Summary

FIC (1)
Macroeconomic (4)
Financial (4)
Investment (3)
Legislative (1)
European News (1)
Social (1)
FIC 
FIC President Cristian Secoşan has stated that investors want stability and predictability
Cristian Secoşan, President of the Foreign Investors Council’s Board of Directors and CEO of Siemens Romania and Moldova, has stated that investors want stability and predictability. As FIC’s President, Mr. Secoşan has indicated that the organization he leads strives to help authorities create stability that is important for both foreign and Romanian investors. He expects economic recovery and GDP growth for Romania, but the major problem has to do with the offer that the state presents to investors.
Macroeconomic 
Government wants to reduce the number of micro-enterprises that benefit from special taxation regime
Nicolae Ciucă government wants to reduce the number of micro-enterprises that currently benefit from a special taxation regime starting from Q4/2022, according to the governing program. The plan targets the reduction of the threshold up to which a company falls into the category of micro-enterprises, which benefit from a very advantageous taxation regime at present. The turnover threshold allowing micro-enterprises to pay a special revenue tax is currently at EUR 1 million.
CFA Romania financial analysts believe economy will slow in 2021
CFA Romania financial analysts became more pessimistic in the survey conducted at the end of September 2021, amid the deepening political and health crisis. Economic sentiment thus fell to 57.2 points on the CFA indicator, the lowest level since February. On the other hand, the industry, constructions and retail managers surveyed by the National Institute of Statistics (INS) forecast a certain stability of activity until the end of the year, as well as price increases. Moreover, the financial analysts also revised downwards their economic growth forecast, from an over 7% real GDP growth in August 2021 to a 6.6% advance in the September projections.
According to a study conducted by Erste, 7 out of 10 Romanians do not have a saving routine
Half of Romanians believe that saving is very important, a higher percentage than in 2019 and 2020. However, 7 out of 10 do not have a saving routine and claim they save money randomly, depending on what they have left in their accounts at the end of the month, after ensuring their current expenses, according to a survey conducted by Erste Group, owner of BCR, in Central and Eastern European countries. Last year, only 44% of Romanians said that saving was important, and the percentage had stood at 36% in 2019. In most countries in the region, 1 in 2 respondents said they saved a fixed amount every month.
Metro Romania CEO Adrian Ariciu has stated that food price increases are only at the beginning
Metro Romania CEO Adrian Ariciu has stated that food price increases are only at the beginning and the cost of the average basket could grow by up to 10% in the following months. He has added that the main threat for the retail industry comes from possible consumption shocks, following the decrease in consumers’ financial resources. Following the increase in prices, consumers will look for the cheapest products in each category, while premium foods will also see an increase in sales; therefore, the middle segment will be the most affected one. Data from the National Institute of Statistics show that food prices were 4.2% higher in September 2021 than in the similar month of 2020 and were up by almost 4% compared to the end of last year.
Financial 
NN Romania has added mortgage loans intermediation to its portfolio of services
NN Romania, one of the main players on the life insurance and private pensions market, has announced that it will add mortgage loans intermediation to its portfolio of services starting from Monday, 1 November, in partnership with ING Bank, thus completing its loan insurance package. Clients who plan to purchase a residence can obtain information from NN consultants regarding mortgage loans from ING Bank worth RON 13,000-900,000, granted over 3-30 year crediting periods, with minimum 15% down-payment.
NBR’s foreign exchange reserves decreased by EUR 1.37 billion in October compared to September
The National Bank of Romania (NBR)’s foreign exchange reserves decreased by EUR 1.37 billion in October compared to September 2021, to EUR 39.8 billion, following EUR 599 million worth of inflows and EUR 1.9 billion worth of outflows. The EUR 599 million inflows represented 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, according to data transmitted by NBR on Monday.
Value and number of payments by cards grew by 60% in two years
The value and number of payments by cards issued by resident payment service providers grew by 60% in June 2021 compared to June 2019, having thus accelerated the digitalization process in the banking system amid the pandemic, according to the DreptulLaBanking analysis, based on statistical data from NBR. The number of payments by cards issued by resident payment service providers was up 61% in June 2021 compared to June 2019, to 327 million, from 203 million in the pre-pandemic year. The value of payments by cards issued by resident payment service providers increased by 60%, to RON 41.4 billion, at the end of June 2021, compared to RON 25.8 billion two years ago, before the onset of the Covid-19 pandemic.
UniCredit Bank has launched virtual debit cards for individuals
Individual clients who have a current account in RON and/or in EUR at UniCredit Bank can instantly issue a Visa Classic and/or Visa Gold virtual debit card from the Mobile Banking application directly, the bank’s representatives announced on Monday. For point of sale (POS) payments, virtual cards can be used by enrolling them into the Apple Pay or Google Pay virtual wallet on clients’ smartphones, while in the case of internet transactions, the virtual debit cards are used the same as regular physical cards, using the information generated in the Mobile Banking application.
Investment 
Local start-up MERO has received EUR 300,000 financing from the Founders Bridge fund
Local start-up MERO (formerly called Nova Booker), which developed a platform for the digitalization of beauty salons’ appointments, has received EUR 300,000 financing from the Founders Bridge fund which will be used to accelerate business growth. The MERO platform was developed by a team from Craiova, the initial investment having amounted to EUR 200,000. Andreea Trif, managing partner at MERO, started the project four years ago, having over 15 years of experience in technology and media companies in Romania and Sweden, where she had coordinated several teams and had developed market-place products both in the start-up and in the scale-up phase.
Novum Business Invest bought a land in Bucharest where it will develop a residential project
Novum Business Invest, known for several real estate projects in Bucharest and for a hotel complex in Neptun Olimp resort - Novum By The Sea, has bought a plot of land in Bucharest, near Carol Park, where it will develop a residential project with 500 apartments, the value of the investment amounting to about EUR 65 million. The complex will be located near Şoseaua Viilor Street and will be developed in two stages, with a total of five blocks of flats, a kindergarten and commercial spaces. The land’s acquisition was mediated by the Crosspoint Real Estate agency.
Ted’S Coffee invested EUR 200,000 in a new unit in Bucharest
Ted’S Coffee Co. coffee chain has announced the opening of a new unit on the ground floor of the One Tower building, part of the One Floreasca City multifunctional project in Bucharest, and has thus reached a network of 47 cafes. This is the second cafe that Ted’S Coffee Co. has opened in the One United Properties projects, after the inauguration of the unit from One Herăstrău Office. The new cafe required a EUR 200,000 investment and has an area of 129 square meters. Ted’S Coffee Co. is a cafe brand launched in 2013 that has developed at national level in shopping centers, office buildings and through street units.
Legislative 
Several USR members have submitted a draft law
Amid the rising gas prices and the risk for hundreds of thousands of Romanians to no longer benefit from centralized district heating and hot water this winter, several MPs from Save Romania Union (USR) have submitted a draft law allowing city halls to borrow money from the State Treasury in order to finance the expenses related to the provision of these public utility services, according to a press release issued the party. USR deputy Oana Cambera, the initiator of the draft law, has stated that a number of 27 municipalities had reported, ever since August that they were unable to ensure the payment of heating costs given the current price increases.
European News 
PM-designate Nicolae Ciuca has submitted the cabinet list and the governing program to Parliament
Prime Minister-designate Nicolae Ciuca has submitted the cabinet list and the governing program to Parliament. Minister hearings are scheduled for Tuesday, and a vote on the new government is due on Wednesday. The new cabinet proposal includes ministers from PNL and UDMR, but the center-right parties do not have enough votes between them. PNL insisted on proposing a minority government despite the other parties saying they would not support a minority Cabinet. The PM-designate said that negotiations with the other parties would continue until the scheduled vote on Tuesday.
Social 
Over 2,000 vials of Remdesivir have been distributed to hospitals treating Covid-19 patients
The Ministry of Health announced on Monday, 1 November, that more than 2,000 vials of Remdesivir had been distributed to hospitals treating Covid-19 patients. The medicine will get to 62 hospitals in the entire country to treat patients with SARS-CoV-2 with moderate forms of the disease. The medicine distribution criteria took into account the minimum number of vials necessary per treated patient and the number of hospitalized and confirmed patients in hospital departments and intensive care units who require administration, according to the decisions of the Health Ministry’s specialized committee.