News

Daily Newsletter - 26 November 2021

Summary

Macroeconomic (4)
Financial (4)
Investment (3)
Legislative (1)
European News (1)
Social (2)
Macroeconomic 
Arrears of the general consolidated budget decreased by 7.4% in October 2021
The arrears of the general consolidated budget decreased by 7.4% in October 2021, compared to the previous month, to RON 215.33 million, from RON 232.52 million, according to data available on the Finance Ministry (MoF)’s website. Arrears exceeding 90 days fell by 3.53%, from RON 76.5 million to RON 73.6 million, while arrears of over 120 days decreased by 9.75%, from RON 100.5 million in September, to RON 90.7 million in October. Moreover, the over 360 day arrears were down from RON 55.5 million to RON 51 million (-8.1%). According to the aforementioned source, local budget arrears were 9.62% lower, having got from RON 213.89 million in September to RON 193.32 million in October).
Rising inflation rate is putting pressure on salary increases planned by private companies
The rising inflation rate is putting pressure on the salary increases planned by private companies in Romania for 2022, previously estimated at an average of 7%, which should be revised upwards by 2-3%, to compensate for the drop in purchasing power, according to the second part of the PayWell 2021 study, conducted by PwC Romania. According to a press release issued by PwC, most companies established their salary increase budgets at the end of the summer, when inflation stood at 4%. Inflation is expected to exceed 7% by the end of the year, which could lead to a revision of salary budgets.
Social security budget revenues will increase by RON 528.789 million
Social security budget revenues will increase by RON 528.789 million, and the unemployment insurance budget will be incremented by RON 127.76 million, according to the draft Government Emergency Ordinance (OUG) adjusting the 2021 state social security budget, published by the Ministry of Finance on Wednesday evening. The increase in current revenues is mainly influenced by the evolution of macroeconomic indicators for 2021 (the rise of the Gross Wage Fund at the level of national economy from 8.4% to 9.1%), of the revenues from social security contributions (including partially recovered revenues from declared social security contributions whose payment had been deferred in 2020, by the effect of the law).
Romania’s budget deficit exceeded 4% of GDP after the first 10 months of 2021
Romania’s budget deficit exceeded 4% of the Gross Domestic Product (GDP) after the first 10 months of this year, higher than the 3.77% deficit reported at the end of September, yet significantly lower than last year, in full pandemic, when it stood at 7.01% of GDP at the end of October. In absolute terms, the budget deficit was RON 47.98 billion at the end of October 2021, lower than the RON 74.04 billion level recorded in the same period of 2020.
Financial 
NBR will put into circulation the RON 20 banknote in December
As of 1 December 2021, the National Bank of Romania will put into circulation a banknote with face value of RON 20. The new banknote will be presented to the public by NBR Governor Mugur Isărescu on Friday, 26 November 2021. It is the first legal tender banknote which features a female personality, namely Ecaterina Teodoroiu. The bank’s representatives have transmitted that they thus support gender equality and the major role of female personalities in Romanian history and society.
UniCredit Bank has opened a branch dedicated to the provision of mortgage loans in Bucharest
UniCredit Bank has opened the first Mortgage Center, a branch dedicated to the provision of mortgage loans exclusively, in Bucharest, in a central location in Charles de Gaulle Square. The bank wants to expand this concept to other major cities in the country as well. The opening of the branch which specializes in mortgage lending completes the similar services provided by the bank in all its branches throughout the country and aims to meet the clients’ need for a single point of contact and where their requests can be solved, as well as for dedicated expertise, given that mortgage products are more complex, and the lending process requires a higher level of knowledge and expertise, according to the bank’s representatives.
Raiffeisen Bank and Rodbun launched a new edition of Elevator Lab ESG in Agriculture program
Raiffeisen Bank Romania, in partnership with Rodbun, has launched Elevator Lab ESG in Agriculture: Cross-Industry Partnership Program, a new edition of Raiffeisen Bank International’s global partnership program, which supports the development of fintech companies and start-ups around the world, according to the information transmitted by the bank. This year, the program will help fintech and agritech start-ups that have solutions or technologies in agriculture to develop pilot projects with Raiffeisen Bank.
ING Bank ended Q3 of 2021 with RON 1.7 billion total revenues
ING Bank ended Q3 of 2021 with RON 1.7 billion total revenues, up by 9%, and a net profit of RON 630 million, up by 42% year-on-year, the bank announced on Thursday. Moreover, the loans portfolio increased by 15%, to a total of RON 32 billion. Over 5,000 consumer loans were granted 100% online, through the Home’Bank mobile application, on average, per month. ING Bank Romania granted RON 1.2 billion new loans in the first four months of the SME Invest 2021 program, 20% more than in 2020.
Investment 
Ikea will start construction works on its store near Timişoara
Swedish furniture and home accessories retailer Ikea is to officially start construction works on its store in Dumbrăviţa locality, near Timişoara, the third one on the local market. The investment in the new store amounts to EUR 60 million, and its construction will last 12 months, with variations depending on the conditions on site. The general contractor is the company Baumpartner Baumtechnic, according to data available in the local media. The land the Ikea store near Timişoara will be built on was bought from businessman Ion Ţiriac in 2019 and has an area of 8 hectares. The transaction was estimated at EUR 8 million.
MOL Romania will start construction works on six of the 14 service stations
MOL Romania is to start construction works on six of the 14 service stations it will build on the A1 Lugoj - Deva and A2 Medgidia - Constanţa highways, based on the concession contracts signed with the National Company for Road Infrastructure Administration (CNAIR) at the beginning of this year. The total value of the company’s investment amounts to approximately EUR 28 million. Moreover, building permits have been issued for two other service stations, located on the A1 Lugoj - Deva highway, and works will start in December.
AFI Europe will enter the apartment rental segment
AFI Europe, indirectly controlled by the Israeli companies Big Shopping Center and Mega Or Holdings, which entered the Romanian market in 2005, has bought two plots of land with a total area of 10,000 square meters in the north of Bucharest, where it intends to build apartments for rent. The land, purchased from Impetum Investments, Impetum Group’s investments division, worth EUR 12 million, has all the building permits needed for the development of about 450 apartments in three separate buildings. AFI Europe Romania plans to develop, on the purchased land, its first residential project that will subsequently be available for rent, a segment that the company is already developing in other countries in the region, under the "AFI home" brand.
Legislative 
Finance Ministry published the draft OUG on 2021 state budget adjustment
On Wednesday evening, the Ministry of Public Finance published the draft Government Emergency Ordinance (OUG) on the 2021 state budget adjustment, which stipulates an increase in the state budget deficit by RON 4.831 billion. The Ministry of Health, the Ministry of Labor and Social Protection and the Ministry of Finance will receive the largest sums upon this year’s second budget adjustment, while the most significant cuts will be operated at the Ministry of Agriculture, Ministry of Transport and Infrastructure, Ministry of Energy and Ministry Economy, according to the draft published on the Finance Ministry’s website.
European News 
EU residents will need to have COVID-19 vaccine booster jabs if they want to travel
European Union residents will need to have COVID-19 vaccine booster jabs if they want to travel to another country in the bloc next summer free of tests or quarantines, the European Commission proposed on Thursday, 25 November. The EU executive also proposed accepting all vaccines approved by the World Health Organization for travel purposes, which would allow non-essential travel to the EU from outside the bloc for people vaccinated with Chinese shots and vaccines made in India. The Commission wants to harmonize rules across the 27 EU nations to allow free movement, a cornerstone of the European Union, but is facing new restrictions as cases break records in Europe and many EU countries roll out booster doses.
Social 
Over 65,000 people got vaccinated against Covid-19 on 24-25 November
The National Committee for the Coordination of Anti-Covid-19 Vaccination Activities (CNCAV) announced on Thursday that more than 65,000 people had got vaccinated against Covid-19 on 24-25 November. 16,800 of them received the first dose of serum or the single dose from Johnson & Johnson. Another 24,891 persons were administered the booster dose for Johnson & Johnson or the third dose. During the same interval, 32 side effects were reported: 19 for the Pfizer vaccine, five for Moderna, two for AstraZeneca and six for Johnson & Johnson.
Information events regarding children’s vaccination will be organized in the following period
The National Committee for the Coordination of Anti-Covid-19 Vaccination Activities (CNCAV) announced on Thursday, after the European Medicines Agency had recommended Pfizer serum for use in children aged 5-11, that it would announce in due time the date when this process would start in Romania, and pointed out that information events would be organized in the following period to provide all the necessary answers to the main concerns and questions received from the population. CNCAV indicated that the dose of Comirnaty would be lower in the case of children aged 5-11 than the one used in people over 12 years of age.