News

Daily Newsletter - 20 January 2023

Summary

FIC (3)
Macroeconomic (3)
Financial (3)
Investment (3)
Legislative (2)
European News (1)
Social (2)
FIC 
The Foreign Investors Council celebrated 25 years of activity in Romania

The Foreign Investors Council (FIC) celebrated this week 25 years of activity in Romania, an occasion that brought together in a constructive dialogue the directors and presidents of the largest companies in the country, representatives of the Government, Parliament, Presidential Administration, regulatory authorities, and international institutions. FIC has a solid history as a partner for debates and consultations with the authorities and a visionary approach to economic issues, with a focus on private investment. During the 25 years of activity, the organization brought together over 255 Romanian companies with foreign capital which contributed with recommendations, analyses, studies and debates that supported Romania’s evolution. Starting with the establishment of the organization, the FIC Board of Directors members have been ambassadors of foreign investments and of Romania as a destination for FDIs. The organization has developed in line with foreign investments in the country, which grew from a 6.8% FDI share of Romania’s GDP in 1997 to 38.64% FDI share in 2021. During the event, the Prime Minister of Romania, Mr. Nicolae Ciuca, emphasized the constant partnership between the Government and FIC in terms of stimulating foreign investments and the organization’s contribution to identifying the best measures for medium and long-term sustainable economic development, dialogue that led to a record level of foreign investments in 2022. Also, the Minister of Economy, Mr. Florin Spataru, the Minister of Labour and Social Solidarity, Mr. Marius Budai, and the Minister of Environment, Waters and Forests, Mr. Barna Tánczos, highlighted the significant collaboration with the investors’ organization, and the measures they are considering to support investments and economic activity: the interactive map of the economic sectors – the Economic Atlas, the industrial development strategy, rethinking of the activity by reducing the impact on the environment and through new technology, ensuring the necessary workforce (by improving dual and technological education and career orientation). The investors in dialogue with the authorities have covered the perspectives of the new Romanian Agency for Investment and Foreign Trade, the process of examining foreign investments, the status of implementation of NRRP and EU funds available to complement private investments, Romania's accession to the OECD, the fiscal framework stability, the implementation of the digitization processes at the level of the administration and the environmental protection measures.

FIC celebrated 25 years of activity in Romania

Foreign Investors Council celebrated 25 years of activity in Romania

FIC celebrated its 25th anniversary in Romania – Bucharest Diplomat

The anniversary of 25 years of activity of the Council of Foreign Investors

The anniversary of 25 years of activity of the Council of Foreign Investors

FIC celebrated 25 years of activity in Romania - Diplomatul Bucharest

FIC celebrated its 25th anniversary in Romania – Bucharest Diplomat

FIC celebrated 25 years of activity in Romania

FIC celebrated 25 years of activity in Romania

PM: We are the country with the highest economic growth in EU 

PM: We are the country with the highest economic growth in EU 

WB's estimates confirm the prospect of steady economic growth for Romania until 2030

FIC published the results of the latest edition of Business Sentiment Index - September 2022

The Foreign Investors Council (FIC) published the results of the latest edition of the Business Sentiment Index (BSI) held in September 2022. The answers show that, despite the current challenges (inflation, energy market crisis and utility prices, geopolitical context, supply chain bottlenecks, available and adequate labour force), investors’ perception of the economic environment in Romania is moderately optimistic. The business environment takes a more cautious approach to new investments compared to last year’s edition when BSI revealed a maximum appetite for investment (since 2014), results that have been captured in the NBR report published at the end of September and which highlight the level of 8.9 billion euros in foreign direct investments in 2021, the second highest value of this indicator after the one in 2008.

The best environmental and sustainability projects were rewarded within Green Report Gala
The best environmental and sustainability projects in Romania were rewarded on Wednesday, 18 January, during the second edition of the Green Report Gala, the most prestigious annual event which recognizes sustainability initiatives carried out in Romania by companies, public institutions or individuals. Ramona Jurubiță, Vice President of the Foreign Investors Council and Country Managing Partner at KPMG Romania was part of the Green Report jury.

The best environmental and sustainability projects in Romania, awarded at the Green Report Gala

The best environmental and sustainability projects in Romania, awarded in the second edition of the Green Report Gala

The best environmental and sustainability projects in Romania, awarded in the second edition of the Green Report Gala

The best environmental and sustainability projects in Romania, awarded at the Green Report Gala

The best environmental and sustainability projects in Romania, awarded in the second edition of the Green Report Gala

The best environmental and sustainability projects in Romania, awarded in the second edition of the Green Report Gala

Macroeconomic 
Companies see inflation and energy crisis as immediate threats to their business
The three main risks in Romania are those related to the energy crisis, macroeconomic risks linked to inflation and the economic environment, and risks related to changes in legislation and regulations, according to information published in Allianz’s latest risk barometer for 2023. At international level, cyber incidents and activity interruption risks are companies’ biggest reasons for concerns for the second year in a row.
The macro-financial context in Romania is affected by the major global uncertainties
The macro-financial context in Romania continues to be affected by the current events, Eugen Rădulescu, Head of the National Bank of Romania’s Financial Stability Department, stated upon the presentation of NBR’s annual Financial Stability Report. He pointed out that there were two severe risks in Romania, namely the increase in global uncertainties amid the energy crisis and the war in Ukraine and the deterioration of domestic macro balances, including as a result of regional and international geopolitical developments.
Economic activity in the euro area has slowed in 2023 compared to 2022
Economic activity in the euro area has slowed this year compared to 2022, but will be well above initial expectations, despite inflation and the energy crisis, European Central Bank President Christine Lagarde said on Thursday. Europe’s labor market in particular has never been so dynamic with unemployment at its lowest level in the past 20 years, the ECB president added.
Financial 
Banks’ profit margins dropped below 3% in 2022
In the first 11 months of 2022, banks recorded lower profit margins - differences between active interest rate on new RON-denominated loans and passive interest rate on new RON-denominated deposits - than in 2021 on the retail segment - between 1.79% and 5.24%. The lowest margin level, of 1.79%, was reported in September 2022. Similarly low levels of banks’ profit margins had also been recorded in 2008 and 2009, when signs of the previous financial crisis were felt on the local market.
Ministry of Finance borrowed a record sum of RON 4.19 billion from banks on Thursday
On Thursday, the Ministry of Finance borrowed a record sum of RON 4.19 billion from banks through an auction of government bonds with a nominal value of RON 500 million, maturing in July 2029, at an interest rate of 7.39% per year. Eight primary dealers participated in the auction. Total demand amounted to RON 4.65 billion, of which banks bid RON 4.51 billion in their own name and RON 20 million on behalf of clients. The coupon rate was 4.85% and the yield to maturity for the average auction price was 7.38%.
UniCredit Bank expands its portfolio with four new themed funds with ESG component
UniCredit Bank, together with its partners from Amundi Asset Management, a top 10 company at global level in terms of managed assets, has launched four new themed investment funds with an ESG component that offer investors portfolio diversification opportunities aligned with the latest market trends in sustainable development, according to a press release. The cited source also indicates that the launch of the four themed funds (CPR Invest Climate Action, CPR Invest Medtech; CPR Invest Hydrogen and AMUNDI Funds Multi-asset sustainable future) completes the portfolio of funds already available in the bank’s offer and promotes responsible financing, in line with UniCredit’s strategy of supporting ESG fundamentals.
Investment 
MedLife inaugurated the largest medical clinic in Deva, following EUR 2.7 million investment
Private healthcare operator MedLife, listed on Bucharest Stock Exchange (BSE) under the symbol M, has announced the opening of its largest medical clinic in the city of Deva, following 13 transactions made in 2022, according to a BSE report. The MedLife Deva Hyperclinic provides access to integrated imaging services, laboratory tests, examinations and comprehensive investigations. The new multidisciplinary unit contains a radiology and imaging department, two biological sample collection cabinets, examination rooms, post-anaesthesia rooms and ten units where 17 medical and surgical specialties will carry out their activity.
Premier Energy has acquired Enex Renewable wind farm in Tulcea
Premier Energy, one of the largest natural gas suppliers in Romania, which manages a pipeline network of over 2,500 kilometres, the largest of an operator not affiliated to any international group, has acquired the Nalbant wind farm (Tulcea), one of the best performing wind farms in the country, previously owned by Enex SRL. This is Premier Energy’s seventh transaction, after the six acquisitions and mergers carried out in 2022, worth almost EUR 55 million. The company has thus become one of the most active players in the renewable energy sector, with renewable energy production capacity reaching 50 MW, in addition to the 700 MW managed portfolio.
Electrica Furnizare is building a 0.2 MW photovoltaic power plant
Electrica Furnizare continues to strengthen its position on the energy services and solutions market in 2023 by entering into a new partnership with Fermador, according to a press release. The turnkey photovoltaic power solution to be provided by Electrica Furnizare for Fermador will allow the latter to reduce its CO2 emissions by more than 53 tons per year. Within the project, 384 photovoltaic modules of 540 WP will be installed on the roof of the Fermador farm in Henci, with a total installed power of 0.2 MW.
Legislative 
Holders of PhD degrees can no longer voluntarily renounce their title
The possibility for authors to renounce their PhD title has been removed from the draft of the new law on higher education, which has been leaked to the press. PhD theses will be available for consultation 90 calendar days before their presentation, subject to copyright rules. Compared to the Cîmpeanu version of the law, this new form is a step forward, according to education expert Ștefan Vlaston.
USR calls for urgent publication of draft amendments to education laws
Save Romania Union (USR) Senator Simona Spătaru has urged Education Minister Ligia Deca to publish the draft amendments to the Education laws. According to a USR press release, the drafts have not been officially presented by the Ministry of Education, despite all the discussions and public pressure on the issue. USR has added that Ligia Deca has ignored calls for her to publicly present the reform directions she wants to pursue, and has not accepted USR’s invitation to come to the Parliament’s Education Committee either.
European News 
European Commission has exhausted all options to tackle soaring food and input prices
The European Commission has exhausted all options to tackle soaring food and input prices, EU Agriculture Commissioner Janusz Wojciechowski told EU lawmakers, reiterating that the only way forward is to increase the EU farming subsidy budget. Speaking in front of the plenary session of the European Parliament on Tuesday (17 January), the Commissioner stressed that soaring inflation has left its mark on the agrifood sector in the past year.
Social 
Romania is among the top countries in the European Union losing their workforce
The labor and pension crisis is deepening in the EU. The EU population has lost about 5 million people over the past ten years, mainly from Romania, Bulgaria and Latvia. The European Commission aims to step up efforts to help European regions train, retain and attract workers in a bid to limit the negative impact of the demographic transition on regional economies and address the decline in the working age population.
Maternal mortality grew by 60% in 2021 year-on-year
After two years of decline, maternal mortality grew considerably in Romania in 2020 and 2021, coinciding with the Covid-19 pandemic. Thus, the number of women who died during pregnancy or after giving birth increased exponentially in 2021, from 32 deaths in 2020 to 51 the following year, an alarming 60% advance, according to data from the National Institute of Statistics (INS). In 2018 and 2019, maternal mortality was down, with 18 and 20 deaths respectively. In this context, Save the Children Romania organization has warned on the need for integrated programs to ensure access to healthcare services for pregnant women in vulnerable communities, and for the proper equipping of maternity hospitals and intensive care units.