During the first meeting of the new
mandate, FIC
Board of Directors re-elected the organization’s management
team remaining consistent with the same vision for economic sustainable
development. Cristian Secoșan continues a new mandate as FIC President,
together with Vice Presidents Ramona Jurubiță and Eric Stab, and Daniel
Anghel as Treasurer. FIC will continue to address strategic themes for
the Romanian economy and provide recommendations for medium and
long-term measures aligned with the European good practices, but at the
same time, it is ready to formulate position papers based on the
expertise and practical knowledge of experts from the member companies
and to react in an agile manner to the current challenges. The FIC
Board of Directors maintains on the agenda the fundamental themes for
Romania’s development: attracting investments, stability and
predictability of the fiscal regime, strengthening the resilience of
the energy sector, implementing sustainable measures in business plans,
environmental protection, ensuring the population’s welfare and health,
technological development, and implementing digital processes.
FIC as leading organization
coagulated the viewpoint of its members and also of other organizations
members of CDR platform to voice the concerns regarding the potential
fiscal modifications, which were particularly discussed with the Prime
minister in the CDR meeting on 16th of June having in mind the various
statements made by politicians. As a result the most important business
organizations in Romania, which reunite the biggest foreign and
Romanian investors, have issued a joint statement making several
recommendations to the Government regarding fiscal measures to balance
the budget situation and not to affect companies operating in the
business sector.
Daniel Anghel, Chairman of the FIC
Foreign Direct Investments Taskforce stated that Romania attracted EUR
7.25 billion foreign direct investments last year, the highest amount
of the past decade, adding that most investments came from the
Netherlands, Germany, Austria, Italy and France. He participated in the
third edition of "RoInvest" and pointed out that foreign investments in
Romania had reached a peak during the period 2004-2009.
FIC published a Study on the taxes
paid by the FIC member companies underlining the significant direct
contribution to the State budget, the economic growth registered in
Romania, as well as to building wealth. The results show a detailed
picture of the major contribution of large Romanian companies with
foreign capital to the state budget, the most important indicator being
the level of VAT collection, which is the highest.
The Romanian Government
and the members of the Coalition for Romania’s Development (CDR), which
reunites the most important business organizations in the country, have
signed a new cooperation agreement regarding consultation on several
strategic issues for the Romanian business environment.
The economic evolution and the social and political situation are
reasons for concern for Romanians part of the Millennials and Z
Generations, who expect economic conditions (59% of Millennials and 49%
of Generation Z) and the social-political context (55% and 45%
respectively) to worsen this year, at least 10% more than in 2021,
according to the Deloitte Global Millennial and Gen Z Survey 2022,
conducted in 46 countries around the world, including Romania. This
outlook makes them more prudent about their jobs. As a result, the
share of those who want to stay in the same company for more than five
years has increased in the past year from 32% to 41% among Millennials,
and from 21% to 42% among Generation Z, while the number of those who
want to leave earlier than two years has decreased from 44% to 28%, and
from 39% to 29% respectively.
According to OTP Bank analysts, economic recovery is slowing down and
GDP growth is visibly affected by the high inflation, by the stagnating
real wages, by the slowing global growth and by the effects of the
Russia-Ukraine conflict. However, it seems that the positive results
recorded in Q1/2022 will be enough to achieve an estimated 4% annual
GDP growth, even if performance in the following quarters slows down,
the bank has indicated. Given the performance of economic recovery, the
results for Q1/2022 came as an unexpected surprise, as the market had
expected a correction in GDP growth in the first three months,
following the stagnation recorded in the second half of 2021.
Romania ranks 7th in the European Union in terms of natural capital - a
component of national wealth, but 16th in terms of produced capital,
Luminița Chivu, Director of the Romanian Academy’s National Institute
for Economic Research (INCE), stated during the National Economic Forum
"Romanian Economic Model in European Union. Romania - Horizon 2040".
She said that the value of the average natural capital per capita was
USD 9,149, Romania ranking 11th among the EU Member States from this
point of view.
The most companies in difficulty in the first four months of 2022 came
from trade and the constructions sector. 40,760 companies were closed
at the level of the entire economy, a record high of the past three
years. During the period January – April 2022, 1,008 trade and
construction companies faced insolvency (+61 compared to the similar
interval of 2021), 8,390 companies were de-registered (+349), 4,302
were dissolved (+711) and 1,729 suspended their activity (+265).
Mandatory automotive insurance (RCA), the most controversial line of
business for insurance companies, has faced three major bankruptcies in
the past ten years, namely Astra Asigurări, Carpatica Asig and now City
Insurance. During all this time, the number of players has shrunk, the
volume of underwritten premiums has tripled, to nearly RON 6 billion,
and insurers have reset their market shares. Ten years ago, the RCA
market had about RON 2 billion underwritten premiums and 11 companies
operating in this line of business. In the meantime, some of the
players stopped selling RCA policies and the market was divided among
the remaining companies.
Insurers must have the capacity and agility to adapt to an intense,
challenging year 2022, with a deteriorating economic environment and
uncertainties, but which may bring new changes and opportunities, Mihai
Tecău, CEO of Omniasig, said in the questionnaire for ZF’s "Romania’s
Business Yearbook. Biggest Players in Economy". Omniasig CEO indicated
that raising awareness of the need for insurance among as many
different categories of public as possible had been the challenge for
both the company and the entire industry since the beginning of 2022.
BCR has accelerated the transition to a "green" cards portfolio in the
past six months, as part of the bank’s commitment to reduce its carbon
footprint through its activities and services. As a result, more than
90% of the cards issued from December up to present through the new
current account packages for individuals available at BCR, George and
George for Young People, were made from recycled materials, which means
a reduction of the carbon footprint by about 2.7 tons.
ING Bank Romania has granted successive tranches of financing amounting
to over EUR 25 million to Boromir Group, the biggest business with
Romanian capital operating in the milling and bread-making sector, in
the past three years. The long-term loans were granted bilaterally and
were contracted for the refurbishment and modernization of the plants
in Râmnicu Vâlcea, including for the construction of a new warehouse
and production space, for the automation of production processes and
for the launch of new product lines, ING representatives have
indicated.
Cristian Nacu, senior country officer for Romania and the Republic of
Moldova of International Finance Corporation (IFC), stated, during
"RoInvest", an event organized by News.ro news agency, that the
institution wanted to invest much more in infrastructure projects in
the following period, as infrastructure investments had been strongly
requested by all its dialogue partners. IFC is the largest global
development institution focusing on the private sector in developing
countries.
AFV Beltrame Group, one of the biggest manufacturers of steel bars and
special steels in Europe, which bought COS Târgovişte in March this
year, recruited personnel and carried out modernization works on the
plant and started producing concrete steel under the Donalam brand,
having thus reached two steel processing units, in Călăraşi and
Târgovişte. Donalam Târgovişte will be the only concrete steel
production unit in Romania. Total investments for the modernization and
refurbishment of the old plant will amount to EUR 100 million over the
next few years. Moreover, the manufacturer will invest EUR 100 million
for the construction of a photovoltaic park to ensure the necessary
power for its production units.
LEMET, one of the leaders of the furniture market in Romania, finalized
over EUR 7 million investments in the construction of new production
facilities and in the development of the LEMS furniture stores network
in the first part of 2022. The LEMET furniture factory in Prahova now
has a functional 6,500 square meter photovoltaic panel power plant and
a new production unit of over 8,500 square meters. The photovoltaic
panel plant has an average annual electricity production of 1,000
MWh/year, thus allowing LEMET to cover a large part of the electricity
consumed in its production activity. Moreover, CO2 emissions have been
reduced by more than 275 tons per year.
During the meeting on Thursday, 23 June 2022, the Government approved a
draft law ratifying the Agreement regarding Cooperation in the Field of
Defense Industry between the Governments of Romania and of Poland,
signed in Warsaw, on 3 March 2022. According to the draft law’s
substantiation note, the Agreement aims to encourage industrial
cooperation and research, development and innovation activities for the
benefit of both parties.
The Government has approved the implementation norms regarding the
regulation of household providers’ activity, thus establishing the way
in which household activity vouchers are granted, the way in which
household beneficiaries can use them, as well as the way in which they
can be exchanged for cash. The new system will only enter into force on
1 January 2024. Until then, the Government has to approve the
implementation norms and to develop the management platform for the new
system. However, the system will remain optional for household activity
providers.
The European Commission tabled a new Nature Restoration Law on
Wednesday (22 June) with legally binding targets and €100 billion for
EU member states to restore nature and reverse biodiversity loss in
agriculture, forests, oceans and urban areas. The aim of the proposed
regulation is to restore natural degraded ecosystems, in particular
those with the most potential to remove and store carbon, and to reduce
the impact of natural disasters linked to global warming. The
Commission proposal came as Europe is hit by extreme weather, with
Italy affected by severe droughts and water shortages already before
the beginning of summer, and intense rain storms leading to severe
flooding in Spain.
The major demand for goods and services after the lifting of Covid-19
restrictions and the conflict in Ukraine have led to an accelerated
rise in inflation, to 14.5% at the end of May, according to the
National Institute of Statistics, having thus affected Romanians’
financial situation. Only some of the employees in Romania have
received pay rises since the start of the year, but in 90% of cases,
the salary increases were below inflation, which has led to a
significant drop in purchasing power, of as much as 50%, according to a
survey conducted on BestJobs recruitment platform.