News

Daily Newsletter - 20 June 2022

Summary

Macroeconomic (3)
Financial (3)
Investment (3)
Legislative (3)
European News (1)
Social (3)
Macroeconomic 
Public debt exceeded the RON 600 billion threshold for the first time in April
Public debt exceeded the RON 600 billion threshold for the first time in April. The increase in public debt comes as the government has borrowed large sums in the past few years to finance the budget deficit. As a result, public debt stood at RON 602.9 billion at the end of April, representing 49.2% of GDP. The Ministry of Finance has recently revised the debt announced for March to 48.4%, from the previously announced 50.3%, following the higher-than-expected increase in nominal GDP. The indicator stood at 50.2% of GDP in January and at 50.6% in February.
Turnover from market services mainly provided to enterprises increased by 23.5%
Turnover from market services mainly provided to enterprises grew by 23.5% as a gross series and by 23% as a working days and seasonally-adjusted series in the first four months of 2022, compared to the same period of 2021, according to data published by the National Institute of Statistics (INS) on Friday. Film making, video and television program production, program broadcasting and transmission activities recorded a 0.3% advance.
Wholesale trade turnover grew by 28.8% in nominal terms
Wholesale trade turnover (except for trade in motor vehicles and motorcycles) grew, in nominal terms, by 28.8% as a gross series and by 28% as a working days and seasonally-adjusted series in the first four months of 2022, compared to the same period of 2021, according to data published by the National Institute of Statistics (INS) on Friday. Wholesale trade in food, beverages and tobacco increased by 0.4%.
Financial 
Libra Internet Bank analyzes and updates in real time the main evolution scenarios
Libra Internet Bank analyzes and updates in real time the main evolution scenarios, as well as the best possible directions of action for each situation, given the current complicated context, aggravated by the conflict in Ukraine, "unpredictable" being the term that best fits 2022, according to the bank’s CEO, Emil Bituleanu. In terms of challenges, Mr. Bituleanu mentions the evolution of the real estate development sector, which the banking institution is closely monitoring and in-depth analyzing.
Banks have started increasing interest rates on households’ term deposits
Banks have started increasing interest rates on households’ term deposits, after, for several months, credit institutions had been watching as inflation reached its highest levels in the past few years and, once NBR raised the monetary policy interest rate, they rapidly increased interest rates on loans first. As a result, the offers of the seven biggest banks on the local market currently start at 1.5% for three-month term deposits for individuals and can reach 6% for 24-month term deposits.
Banks have started the restructuring and digitalization processes
Many retailers have implemented the business model based on technology, on digitalization, in recent years, and banks, just like supermarkets, basically invite clients to access the products they want, to obtain them themselves and to pay/reimburse them themselves, thus reducing the number of front-office employees, of the traditional "cashiers". Bankers and retailers started placing bigger focus on the digital revolution amid the COVID-19 pandemic.
Investment 
Philip Morris to invest USD 100 million in 2022-2023
Cigarettes and heated tobacco products manufacturer Philip Morris will invest USD 100 million in 2022-2023 to increase its production capacity for smoke-free products in Romania and to reduce its environmental impact. Philip Morris’s investment in smoke-free products in Romania during the interval 2017-2023 will thus reach USD 600 million. There are approximately 300,000 users of IQOS, the smokeless product manufactured by Philip Morris, and about 5 million smokers in Romania.
Medisprof is investing EUR 2 million in the oncology center in Piatra Neamt
Medisprof Cancer Center, a company founded by doctor Carolina Udrea, is investing EUR 2 million in the oncology center in Piatra Neamt, but will also start construction works on the second hospital in Cluj-Napoca. The new hospital in Cluj will be double the size of the existing one, and will provide complementary services to the current ones through surgery (4 robotic modular rooms), nuclear medicine, imaging and top-level radiotherapy. The investment in equipment will amount to EUR 10 million, and construction works have been evaluated at EUR 12 million.
Calypso expects RON 121 million turnover following an extensive investment process
Water producer Calipso, owned by Florica and Daciana Siderache, expects to record a RON 121 million turnover in 2022, up by 75% against 2021, as a result of an extensive investment process, according to information provided by company representatives. Calipso, the producer of the Miraqua and Codrii Vlăsiei spring water brands, was founded in 1991 and has a factory in Afumați, Ilfov County.
Legislative 
PNL submitted a draft law amending the Law on Physical Education and Sport
Several parliamentarians from the National Liberal Party have submitted a draft normative act amending the Law on Physical Education and Sport by introducing e-sports among the activities considered to be sports branches. In Romania, the activity of the game development industry behind E-Sports has been evaluated at a market value of over EUR 220,000,000, and the cumulative value of prizes from E-Sports competitions and events exceeds RON 2,000,000 this year, according to initiators’ representatives.
Klaus Iohannis promulgated the law approving OUG on "Anghel Saligny" Program
The Presidential Administration has transmitted that President Klaus Iohannis has promulgated the law approving Government Emergency Ordinance (OUG) 95/2021 regarding the "Anghel Saligny" National Investments Program. The law aims to create a legislative framework allowing administrative-territorial units to promote investment projects in eligible sectors, so as to ensure access to essential services for the entire population, increase the quality of living and avoid the risk of depopulation in underdeveloped communities.
A legislative proposal amending Law 227/2015 has been submitted to the Romanian Senate
A legislative proposal amending Law 227/2015 on the Fiscal Code has been submitted to the Romanian Senate. The draft law proposes a tax exemption on vouchers granted to all employees. The legislative proposal in question, no. B365/2022, was registered at the Senate on 08 June 2022. It targets food vouchers, nursery vouchers, holiday vouchers and cultural vouchers, which would be non-taxable (with no limit on their value), except for gift vouchers which the RON 300 threshold would continue to apply for.
European News 
EU should grant candidate status to Ukraine and Moldova
The EU should grant candidate status to Ukraine and Moldova, bringing them a step closer to bloc membership, while Georgia still has some homework to do, the European Commission said on Friday, 17 June, in a highly-anticipated opinion on the bloc’s future enlargement. Ukraine applied for EU membership just days after Russia launched its invasion on 24 February, with Georgia and Moldova following suit over fears of aggression and influence from Moscow.
Social 
Romanians working abroad sent home more than EUR 1.7 billion
Romanians working abroad sent home more than EUR 1.7 billion in the first four months of 2022, well above the same period of 2021. The biggest remittances came from Germany and the UK. This is because many Romanians left Italy and Spain, where they were worse paid. Moreover, Germany is receiving more and more Romanians, who activate in various sectors, from constructions and agriculture, to engineering and healthcare services.
Unemployment rate grew to 6% in Q1/2022
Unemployment rate was 6% in Q1/2022, up by 0.1% against the previous quarter. Moreover, youth unemployment (age category 15-24) reached its highest level ever, of 23.2%, according to data published by the National Institute of Statistics on Friday. By gender, the gap between the two unemployment rates was 0.9% (6.4% among men compared to 5.5% among women) and by residential background, the gap was 6.2% (9.6% in rural areas compared to 3.4% in urban areas). Apart from the 7.743 million employed persons, another 610,700 persons worked in their own agricultural households to produce agricultural goods intended exclusively or mainly for their own consumption.
Young people have been extensively using the BestJobs recruitment platform
Young people part of the new generation are becoming increasingly active and have been extensively using the BestJobs recruitment platform in search of internships, part-time or seasonal jobs to help them gain experience or at least secure a source of income during the summer. More than 4,000 new resumes have been filled on the platform by candidates aged between 18 and 24 in the past month. 43% of the jobs available on the recruitment platform are for candidates with zero experience.