News

Daily Newsletter - 24 July 2020

Summary

Macroeconomic News (4)

COVID-19 crisis is redrawing investment map

The uncertainty generated by the COVID-19 pandemic is far from ending, and its effects on the world's economies are increasingly difficult to estimate. Under these conditions, competition for financial resources is growing. Globally, the flow of investment is expected to decline this year by more than 30%, according to OECD's optimistic scenario. In Romania, foreign direct investment was on the decline in the first part of this year, while domestic investment, although in slightly better shape compared to previous years, is not enough to keep the economy running.

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Farmers can apply for business development grants

The Cabinet has approved the program to encourage rural entrepreneurship, which lets farmers apply for grants worth between EUR 40,000 and EUR 200,000. The funds can be used for the development of agricultural product processing, distribution and packaging operations. The total budget allocated to the program is EUR 200 million. For the first time, farmer associations are also included among the beneficiaries.

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Diesel subsidy funds supplemented

The funds allocated for the distribution of subsidies for the diesel fuel used in agriculture between January 1 and March 31, 2020, were increased by RON 101.9 million, up to a total value of RON 629.9 million, according to an Order issued at Wednesday's Cabinet meeting.

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RON 260 million allocated to PNDL

The Cabinet approved, at Wednesday's meeting, the allocation of RON 260 million, from the Budget Reserve Fund, for financing the National Local Development Program (PNDL) - stages I and II. The amount ensures the continuity of the program in the next period, by honoring the transfer requests registered with the Ministry of Public Works (MLPDA).

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Financial News (4)

RON-denominated retail deposits up

The total value of deposits owned by non-government clients dropped 0.4% in June, down to RON 382 billion, while rising 13.4% on an annual basis, according to the National Bank of Romania (BNR). The residents' RON-denominated deposits account for 64% of all non-government client deposits.

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Patria Bank earnings plunge

Patria Bank issued a new earnings estimate for this year: RON 6.6 million, compared to the RON 23.1 million estimate released at the beginning of the year. However, the new figure is still above last year's RON 5.3 million, while the bank's Q1 earnings are roughly equal to those reported for Q1, 2019.

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Borrowing recovered in June

The balance of private credit rose 0.4% in June, after two consecutive months of contraction caused by the coronavirus pandemic. Private credit increased by RON 971 million (about 0.4%) in June, compared to May, reaching a total of RON 270.1 billion, thus coming closer to April's level, but remained below March's figures. The annual growth rate of 4.1% is substantially below that of March (6.9%), according to data published by the National Bank of Romania (BNR).

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"Noua Casa" program to feature two loan categories

The "Noua Casa" program will feature two categories of loans for new houses: loans worth up to EUR 140,000, with 15% down payment and 60% state guarantee, and loans worth up to EUR 70,000, with 5% down payment and 50% state guarantee, according to FNGCIMM.

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Investment News (1)

PM announces huge Cernavoda investment project

Prime Minister Ludovic Orban announced on Thursday that the government wants to invest EUR 8-9 billion in the Nuclear Power Plant (CNE) in Cernavoda, adding that these projects must be carried out with the help of "serious partners" in the Euro-Atlantic area. The government wants to retool reactor 1 and begin the construction of reactors 3 and 4.

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Legislative News (1)

Employee discrimination or firing could result in fines

President Klaus Iohannis has signed a law that amends the Labor Code in order to introduce fines ranging between RON 1,000 and RON 20,000 for discriminating or firing employees based on race, ethnicity, religion, citizenship, genetic traits, social origin, sex, sexual orientation, handicap, age, chronic illness, HIV positive status, political options, union activity, or being part of a vulnerable category.

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Politics (2)

Iohannis: It's important for Romania to be a part of NATO for its protection, but also to offer security

"This exercise and the handing over of the NATO unit flag proves that it's important for Romania to be a part of NATO for its protection, but also to offer security to our allies and partners," said President Iohannis at the ceremony establishing the South East Multinational Corps Command (MNC-SE).

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PM reiterates support for December 6 election

Prime Minister Ludovic Orban has said that the date of the parliamentary elections must be December 6, in order to comply with the constitutional provisions and the situation arising from the end of the current Parliament's term.

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Social (1)

85% of Romanians say local products should be prioritized

Almost 85% of Romanians believe that, in the current context, Romanian products should be prioritized during shopping, while 30% say they prefer to work in a Romanian capital company, instead of a foreign company, according to a BestJobs survey. Precisely for this reason, more than half of the respondents say that, since the outbreak of the pandemic, they have been prioritizing Romanian products.

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