News

Daily Newsletter - 21 October 2021

Summary

Macroeconomic (3)
Financial (2)
Investment (3)
Legislative (1)
European News (1)
Social (2)
Macroeconomic 
Specialists believe that Europe should not see an inflation spiral
Europe should not see an inflation spiral as a spike in energy prices is expected to fade next year and there is slack in the continent’s labor market, the IMF European Department chief, Alfred Kammer said on Wednesday, 20 October. He explained that a supply-demand mismatch on energy was partly due to the restart of economic activity and other factors such as the weather.
Romania ranks 5th in EU in terms of annual inflation rate
Romania ranks 5th in the European Union in terms of annual inflation, with a 5.2% rate, according to the latest data published by Eurostat, much above the 3.6% EU average. Eurostat points out that the largest share in the euro area inflation rate comes from energy products (+ 1.63%), followed by services (+ 0.72%), non-energy industrial goods (+ 0.57%), as well as food, alcohol and tobacco (+ 0.44%).
Industrial constructions market fell by 5.72% at national level in H1/2021
The industrial constructions market fell by 5.72% at national level in the first half of 2021, compared to 2020, according to a relevant study published on Wednesday. The data analyzed by the site sales assistance platform Victa.ro show that there were 2,762 monitored industrial investments in the first half of 2020 and their number decreased to 2,604 in 2021. The most investments were announced in June (699 industrial projects), above the maximum level for the same period of 2020, while January is at the other end of the classification, with only 280 identified projects.
Financial 
Wolf Theiss law firm assisted BCR within its first green bonds issue
Wolf Theiss provided legal assistance to Banca Comercială Română within its first issue of Senior Preferential Green Bonds, worth RON 500 million, with 5% interest rate and due in 2028, based on its EMTN Multi Issuer Program. The international team involved in this project, coordinated by partner lawyers Claus Schneider and Claudia Chiper, was made up of capital market experts from Wolf Theiss, namely senior lawyer Nikolaus Dinhof-Renezeder and lawyers Andreea Tudorache and Sebastian Prakljacic.
The political crisis and high inflation call for further interest rate increases
According to OTP Bank analysts, the 0.25% increase in the monetary policy interest rate decided by the National Bank of Romania is the first step in a series of necessary key rate increases to balance the effects of the political crisis and of the rising inflation. NBR raised the key rate to 1.5% at the beginning of October in order to adapt to market conditions and to the influences of international trends. The recent signs to have indicated this evolution were the increase in interbank interest rates and the upward change of the international yield curve, which triggered higher risk costs for Romanian assets. Moreover, as European energy prices continue to grow, domestic political uncertainty has deepened, posing a risk to local fiscal consolidation.
Investment 
Medima Health ends the first year of activity with six operational clinics
The national network of medical imaging and radiology clinics Medima Health will end the first year of activity on the Romanian market with six operational clinics at national level, following an over EUR 7 million investment volume. Next year, the company plans to inaugurate three more units, in Bucharest and in the rest of the country, and expects to finalize the construction of the Oncology Diagnostic Center in Târgu - Mureş, whose total investment amounts to about EUR 5.5 million.
Nucul de Aur Agricultural Cooperative has finalized a RON 5.8 million investment
Nucul de Aur Agricultural Cooperative, based in Suceava and formed of 20 fruit and vegetable producers from Suceava, Iaşi, Botoşani and Vaslui Counties, has finalized the RON 5.8 million investment in a dehydrated fruit factory, financed from European funds and a bank loan. Representatives of Nucul de Aur Cooperative have indicated that they have put the plum washing and dehydration line into operation, and will dehydrate apples as well starting from December.
WDP has invested EUR 14 million in the acquisition of lands in Romania this year
This year, WDP has invested EUR 14 million in the acquisition of lands in Romania alone, in Dragomireşti and Ştefăneştii de Jos. These include a 60,000 square meter plot of land, in Timişoara, a EUR 5 million investment, located near the Sport Mechanical Workshop bicycle factory, which is a supplier for Decathlon. Another project consists in the construction of a parking lot in Ştefăneştii de Jos, close to other WDP projects. The EUR 4 million investment will be finalized by the end of this year.
Legislative 
Parliament’s Decision approving the first state of alert was unconstitutional
On Wednesday, the Constitutional Court of Romania (CCR) unanimously approved the notification filed by 50 MPs regarding the unconstitutional nature of Romanian Parliament’s Decision no. 5/2020 approving the state of alert and the measures established through Government Decision no. 394/2020 regarding the state of alert and the measures applying during it to prevent and combat the effects of the COVID-19 pandemic. However, the Court indicated that Government Decision no. 394/2020 continued to generate legal effects and remained in force in its unmodified version based on the provisions of Romanian Parliament’s Decision no. 5/2020.
European News 
European Commission took another step towards reforming EU’s fiscal rules
On Tuesday, 19 October, the European Commission took another step towards reforming the EU’s much-discussed fiscal rules, including the bloc’s strict debt and deficit limits enshrined in the Stability and Growth Pact. The Commission Vice-President in charge of the economy, Valdis Dombrovskis, and the EU’s Economic Affairs Commissioner, Paolo Gentiloni, presented the re-launch of the EU’s economic governance review in Brussels on Tuesday.
Social 
President Klaus Iohannis has announced new restrictions to be imposed in Romania
President Klaus Iohannis has announced the restrictions that could be imposed amid the Covid-19 pandemic. The government will decide upon the exact restrictions by Friday, after experts establish these norms in detail. Thus, according to the new decisions to be made, only vaccinated people will be allowed to travel at night, and the Covid-19 digital green certificate will become mandatory for most activities. Moreover, wearing a protective mask will be mandatory in all indoor and outdoor areas.
Romania could have a population of 17.8 million people in 2030
Tudorel Andrei, the president of the National Institute of Statistics, stated on Wednesday, during an online event, that Romania could have a population of 17.8 million people in 2030 if the current downward trend was maintained. The country will thus fall from the 6th place in the European Union at this moment, to the 7th place, being outranked by the Netherlands. According to the presented data, Romania’s population was of 19,186,201 people on 1 January 2021, compared to 20,121,641 people in 2011. Tudorel Andrei said that a change had occurred in the share of factors leading to the reduction of the population in this period.