Prices of consumer goods and services vary considerably in the European Union. The highest price level among EU Member States was observed in Denmark and Ireland, both 40 % above the EU average, while in Romania and Bulgaria the price level was 44 % below the EU average, according to Eurostat data. The price level index in Romania is close to that in Poland, at 40% below the EU average, and in Serbia, a non-EU country where prices are also 40% below the community bloc’s average. At the other end of the classification, there are Luxembourg (132%), Sweden (128%) and Finland (126%), where the prices of goods and services are much above the EU average.
76% of Romanians are concerned about an economic crisis that could affect their financial situation, according to the results of the latest edition of the UNSAR-IRES Barometer on Risk Perception and Insurance Culture in Romania (2022). The galloping inflation is a reason for concern for 68% of respondents, followed by the war (64%), fires and car accidents (61%) and pandemics/illnesses (57%). As they get older, the share of those very and extremely concerned about the possibility of undesirable events increases. Moreover, those living in urban areas and those with middle incomes are more likely to be concerned about these issues.
Annual inflation rate in the euro area, which reached the record high of 8.1% in May, risks fuelling "inflationary psychology", European Central Bank chief economist Philip Lane warned in London, referring to a phenomenon when consumers and businesses adjust their habits in anticipation of higher prices, Reuters reports. Once inflation psychology sets in, consumers bring forward their spending to "beat" the rise in prices while businesses start lifting their own prices, expecting higher costs, with both behaviors perpetuating inflation.
Raiffeisen Bank has increased interest rates on RON-denominated deposits for small and medium-sized enterprises (SMEs) to 3.75% per year on the one-month maturity and to 4% per year on three-month deposits. Raiffeisen Group has been activating on the Romanian banking market for 25 years and serves about 2.3 million clients, individuals and companies. The bank has nearly 4,700 employees, 300 branches throughout the country, 1,131 ATMs and MFMs and a network of over 26,400 POSs.
UniCredit Bank has modified interest rates on RON-denominated term deposits and offers individuals yields of up to 6% per year, with the possibility of obtaining an additional 0.30% of interest if they use Mobile Banking or Online Banking. The minimum amount required to open a deposit, regardless of duration and means of establishment, is RON 500 for all categories of retail clients.
Traian Halalai, president and CEO of EximBank, a state-owned bank, has stated that 2021 was a good year for the bank, as it managed to gain market share and thus enter the top ten banks on the market. The bank’s assets climbed to RON 14.1 billion in 2021, up by 25% against 2020. OTP Bank ranked ninth, with RON 18.5 billion assets, while the first place was filled by Banca Transilvania, with RON 125 billion. The entire banking system had RON 640 billion assets in 2021. Granted loans reached RON 7.3 billion. The reported net profit stood at RON 31.3 million on a net banking income of RON 277 million. The bank had 416 employees, with a net profit per employee of RON 75,000 and a net profit per branch of RON 1.25 million. Return on assets was 0.2% and return on equity stood at 2.6%. The bank’s equity capital amounted to RON 1.2 billion.
Hungarian Minister of Foreign Affairs and Trade Peter Szijjarto has announced that Audi subsidiary in Hungary will invest 120 billion forint (USD 320.2 million) to increase production of electric vehicle engines at its plant in Gyor. The official has indicated that Audi, which had previously announced that it could significantly increase production at that plant, will start producing the new engines in 2025 and would recruit an additional 500 employees.
Local capital developer Camicna Development has started construction works on the luxury boutique residential project Acmanic, an investment worth EUR 25 million. The project is located in Iancu Nicolae area in the north of Bucharest. Acmanic will consist of 51 apartments, located in two buildings with three floors each. The project is due for finalization in the fourth quarter of 2023.
Star Stone, the biggest Romanian manufacturer of premium paving for the residential sector, is expanding its business and investing EUR 350,000 for the launch of a new category of products, namely metal confections, according to a press release. The initiative is meant to complete the Traverstone Block range of ready-finished fence bolts, a unique product on the market, launched in the autumn of 2021. The two categories launched by Star Stone lay the foundations for a new market niche with products for complete fences that can be rapidly assembled within a DIY (Do It Yourself) regime.
Cargus plans to make significant investments in 2022, as well as in the next two years, with a strong focus on technological innovations and new delivery solutions, such as the APM (lockers) network to be launched in the second half of 2022. Over the past two years, Cargus has invested EUR 20 million in its operational infrastructure, in technological solutions for end recipients and in affordable and fast delivery services.
The Parliament, through the final vote of deputies, has adopted the draft law regulating the general framework applicable to national development banks, so that they can carry out their activity on Romania’s territory. The new bank, through which the state wants important projects such as infrastructure ones, to be financed, is not a new project, but it was recently included by the Government in the National Recovery and Resilience Plan (PNRR).
During Tuesday’s plenary session, the Chamber of Deputies rejected the draft law on mayors’ election in two rounds of elections. The draft law had been submitted in 2015 and had been stuck in committees at the Chamber of Deputies for seven years. The draft law regulates the amendments to Law 115/2015 on the election of local public administration authorities, targeting the amending of the Local Public Administration Law no. 215/2001, and the amending and completing of Law no. 393/2004 on Locally Elected Officials’ Statute, by modifying the way mayors are elected.
Sex education in schools will only be taught starting from the 8th grade and with parents’ written consent exclusively, according to a vote in the Chamber of Deputies, the decision-making chamber, on Tuesday. The law that regulates sex education in schools had been sent back to Parliament by President Iohannis and will now go back for promulgation. The programs to be taught are aimed at preventing sexually transmitted diseases and underage pregnancy, a major social problem in Romania.
The European Commission approved a EUR 500 million scheme to support the growth of new forest areas, a part of Romania’s strategy to ensure the protection of forests and biodiversity. The scheme is part of Romania’s recovery and resilience plan, and it aims to help owners of farming land suitable for afforestation to establish new forest areas, which will generate a positive climatic impact in the long-term, the Commission said.
The Ministry of European Projects and Investments (MIPE) announced on Monday that more than 12,000 Romanians had received, on their social cards, the first of the four tranches of the RON 250 aid granted by the government and, by 1 July, 500,000 people would be able to use the money to buy food products or warm meals from the network of over 24,400 affiliated stores. Moreover, by the end of this week, about 350,000 Romanians will receive the social cards, which are being charged as they are distributed. Should small delays occur for objective reasons related to the phased production and distribution mechanism, MIPE assured that there was no risk for any of the potential beneficiaries not to receive the aid, according to Ministry representatives.