The Foreign Investors
Council (FIC) celebrated 25 years of activity in Romania, an occasion
that brought together in a constructive dialogue the directors and
presidents of the largest companies in the country, representatives of
the Government, Parliament, Presidential Administration, regulatory
authorities, and international institutions. FIC has a solid history as
a partner for debates and consultations with the authorities and a
visionary approach to economic issues, with a focus on private
investment. During the 25 years of activity, the organization brought
together over 255 Romanian companies with foreign capital which
contributed with recommendations, analyses, studies and debates that
supported Romania’s evolution. Starting with the establishment of the
organization, the FIC Board of Directors members have been ambassadors
of foreign investments and of Romania as a destination for FDIs. The
organization has developed in line with foreign investments in the
country, which grew from a 6.8% FDI share of Romania’s GDP in 1997 to
38.64% FDI share in 2021. During the event, the Prime Minister of
Romania, Mr. Nicolae Ciuca, emphasized the constant partnership between
the Government and FIC in terms of stimulating foreign investments and
the organization’s contribution to identifying the best measures for
medium and long-term sustainable economic development, dialogue that
led to a record level of foreign investments in 2022. Also, the
Minister of Economy, Mr. Florin Spataru, the Minister of Labour and
Social Solidarity, Mr. Marius Budai, and the Minister of Environment,
Waters and Forests, Mr. Barna Tánczos, highlighted the significant
collaboration with the investors’ organization, and the measures they
are considering to support investments and economic activity: the
interactive map of the economic sectors – the Economic Atlas, the
industrial development strategy, rethinking of the activity by reducing
the impact on the environment and through new technology, ensuring the
necessary workforce (by improving dual and technological education and
career orientation). The investors in dialogue with the authorities
have covered the perspectives of the new Romanian Agency for Investment
and Foreign Trade, the process of examining foreign investments, the
status of implementation of NRRP and EU funds available to complement
private investments, Romania's accession to the OECD, the fiscal
framework stability, the implementation of the digitization processes
at the level of the administration and the environmental protection
measures.
The seasonally adjusted government deficit stood at 3.3% of GDP in the
euro area and 3.2% of GDP in the European Union in Q3/2022. Romania and
Hungary recorded the highest such deficits, according to Eurostat data.
Deficits grew in the EU and the euro area in July-September 2022,
compared to Q2/2022, following the measures taken by governments to
mitigate the impact of high energy prices. The EU member states with no
government deficit in Q3/2022 were Ireland, Portugal, Lithuania,
Denmark, the Netherlands and Sweden.
The National Bank of Romania (NBR) expects annual inflation rate to
probably decline in Q1/2023, in line with the latest medium-term
forecast, but to decrease significantly faster afterwards and to reach
single-digit levels as early as Q3/2022, almost three quarters earlier
than previously projected. That would be ascribable to the extension of
the energy price capping and compensation schemes until 31 March 2025
concurrently with the changes made to these schemes as of 1 January
2023, according to the minutes of the monetary policy meeting on 10
January 2023 published by the National Bank.
A number of threats remain on the horizon in Romania’s macroeconomic
picture, with the National Bank talking about the size and pace of the
widening external deficit in 2022 being particularly worrying, company
bankruptcies, exchange rate risks, high interest rates, lending
decline, major risks associated with the fiscal policy stance and the
economic slowdown, according to the minutes of the monetary policy
meeting on 10 January. The protraction of the war in Ukraine and the
extension of the related sanctions generated, however, considerable
uncertainties and risks to the outlook for economic activity, hence to
medium-term inflation developments, Board members repeatedly showed.
They referred to the possibly stronger effects thus exerted on consumer
purchasing power and confidence.
General government gross debt to GDP ratio in the euro area stood at
93% at the end of Q3/2022, down from 94.2% at the end of the previous
quarter. In the European Union, the ratio also decreased from 86.4% to
85.1%, according to Eurostat data. The highest ratios of government
debt to GDP among EU Member States at the end of Q3/2022 were recorded
in Greece (178.2%), Italy (147.3%), Portugal (120.1%), Spain (115, 6%),
France (113.4%) and Belgium (106.3%), and the lowest ones were in
Estonia (15.8%), Bulgaria (23.1%), Luxembourg (24.6%), Denmark (30.7%),
Sweden (33.6%), Lithuania (37.3%), Latvia (39.9%), the Czech Republic
(45.2%) and Romania (47.8%). Romania recorded a 48.3% government debt
to GDP ratio in Q2/ 2022 and 48.1% in the first three months of 2022.
JC Flowers investment fund, founded by US billionaire J. Christopher
Flowers, plans to sell First Bank, according to sources close to the
talks, cited by Bloomberg. JC Flowers has collaborated with Societe
Generale to identify potential buyers. According to the cited sources,
First Bank would be valued at around EUR 150 million in an eventual
transaction. Italian group UniCredit has held preliminary talks with JC
Flowers in the past few weeks, but has decided not to make an offer,
some of the sources have indicated. Under these circumstances, the US
investment fund could approach potential new buyers in the following
period.
EximBank, a state-owned bank that is among the ten biggest credit
institutions in Romania asset-wise, which has entered the retail
segment in 2023 after the finalization of the merger with Banca
Românească, offers interest rates on RON-denominated term deposits
ranging from 6.75% to 8% for individuals, according to information
provided by the bank. Interest rate can thus go up to 8.25% for a
one-year deposit made online.
The flow of loans contracted by companies for machinery and equipment
has grown considerably, but this type of loans have a modest
contribution to financing investments (6% in 2020, according to the
National Institute of Statistics), with most investments being financed
from legal entities’ own sources (75%), the National Bank of Romania
(NBR) has indicated. On the other hand, the volume of loans granted for
current needs (stock financing and treasury loans) increased
substantially in 2022. These loans accounted for 70% of the total new
loans in the first nine months of 2022, compared with 67% in 2021, NBR
has also pointed out.
Romanian national railway company CFR SA has launched an over RON 471
million (about EUR 95 million) project, VAT not included, financed
within the Transport Operational Program (POT), for the modernization
of the North Railway Station in Bucharest. CFR SA has transmitted the
tender documentation for the design and execution contract
corresponding to the first phase of the project to the Public
Electronic Procurement System (SEAP). The investment is meant to turn
the North Station into a modern multimodal point and an attractive
commercial area of Bucharest.
Policolor-Orgachim, which manufactures paints and lacquers for
construction, will expand its factory in Militari area of Bucharest
this year by 1,000 square meters, following a EUR 2 million estimated
investment. The paints factory, located on Timisoara Boulevard,
currently spreads on 3,500 square metres, and the expansion will be
carried out by Masterbuild, the company selected following a tender.
The extension project should be finalized by the middle of 2023.
Amazon.com’s cloud services division plans to invest another USD 35
billion by 2040 to expand data centers in Virginia. Amazon Web Services
(AWS) has indicated that the new investment will create 1,000 jobs.
Virginia’s Republican Governor, Glenn Youngkin has stated that AWS will
establish multiple data center campuses across Virginia. In 2021, AWS
announced that it had invested USD 35 billion in data centers located
in northern Virginia from 2011 to 2020 and had 3,500 full-time
employees at its data centers in the state.
Ministry of Investments and European Projects (MIPE) is preparing a
government decision to establish how the bonuses for work on externally
funded projects - which will be minimum 10% and maximum 50% - will be
granted. Some local elected representatives will also benefit from a
bonus of up to 25%. According to a government decision currently up for
public consultation, teams working on projects financed from
non-reimbursable European funds and/or reimbursable external funds, as
well as for the implementation of projects financed through the
Recovery and Resilience Facility will benefit from an up to 50%
increase in their basic salaries or employment allowances while
carrying out their activity under these circumstances, depending on the
actual time worked per month on project activities.
The Social Democratic Party (PSD) announced, in an official press
release, that MEP Dan Nica’s report on regulating and boosting the
European semiconductors industry had been approved by the European
Parliament’s Industry, Energy and Research Committee (ITRE) on Tuesday.
The legislative proposals submitted by the leader of PSD delegation
were adopted with 67 votes in favor, 1 vote against and 4 abstentions.
Moreover, the committee also voted on the mandate to enter into
inter-institutional negotiations, with 70 votes to one against, with
one abstention.
The European Commission launched its European Cancer Imaging Initiative
on Monday (23 January), which aims to create a common digital
infrastructure across the EU to facilitate data sharing on the disease.
The initiative aims to help healthcare professionals integrate
cutting-edge imaging technologies to improve cancer detection and
treatment through digital infrastructure.
The number of social assistance (guaranteed minimum income)
beneficiaries was 163,789 in December 2022, 4,064 more than in the
previous month, according to data centralized by the National Agency
for Payments and Social Inspection (ANPIS). The most beneficiaries were
registered in Dolj (10,109), Bacău ((9. 202), Teleorman (7,772) and
Buzău (7,771) Counties, and the fewest in Bucharest (247) and in Ilfov
(862) and Timiș (1,318) Counties. The average amount paid by the
Romanian state to social aid beneficiaries in the last month of 2022
was RON 269.57, while the total sum paid amounted to RON 44.136
million. The highest average sums paid (current rights) were recorded
in Sălaj (RON 353.7), Brașov (RON 324.68) and Mureș (RON 324.12)
counties.
Children who need psychological counselling and treatment can now
benefit from state support. These psychological therapy sessions will
be settled by the state, through the social inspection and payment
agencies in each county. The state will pay for maximum ten sessions
(50 minutes each) of psychological treatment for children, for a period
of up to 120 days. The state thus means to help children through the
National Children’s Support Program amid the COVID-19 pandemic - "Out
of Care for Children". According to statistics, the number of children
who have suffered due to the pandemic has been very high, which is why
this program has been launched.