News

Daily Newsletter - 27 July 2020

Summary

FIC (1)

How can Romania attract the FDI it needs to recover?

As Romania posted a negative foreign direct investment (FDI) inflow in 2020, we should look at solutions for recovery in the short and medium term. Romania must act decisively to retain its attractiveness. COVID-19’s impact on market demand and operational capacity varies significantly by sector and this influences FDI as well. A global survey of investment promotion agencies conducted by the World Bank revealed that supply chain disruptions were hitting production and revenues. This is resulting in Capex and employment reductions in investment plans, particularly impacting manufacturing investments in the transportation and textile industries.“We need to have a much more proactive approach to attracting foreign investment in the country and, at the same time, work on Romania’s image as a destination that should be on the map for potential investors,” said the president of the Foreign Investors’ Council (FIC), Ramona Jurubita.

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Macroeconomic News (3)

Romania's public debt booms

The economic crisis that has engulfed the whole world, brought about by the COVID-19 pandemic, is making Romania's public finance situation harder: at the end of May, 2020, the state's public debt increased to RON 428.3 billion, up RON 27 billion from March and RON 55 billion lei from the end of 2019. The official report was released by the Ministry of Finance (MFP).

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Romania's modern retail space stock to exceed 4 million sqm by year's end

Romania's stock of modern retail space, which includes shopping centers, retail parks and shopping galleries, will exceed 4 million square meters this year, according to reports published by Cushman & Wakefield Echinox. Bucharest has 1.25 million square meters, almost as much as the entire Center-West region (1.33 million sqm), as well as a market of almost 2.6 million consumers.

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Romania has EUR 24 billion for "green" projects

Out of a total of almost EUR 80 billion obtained at the European Council negotiations, Romania will be able to use EUR 24 billion for "green" projects, according to the Minister of Environment, Waters and Forests, Costel Alexe. The Ministry's priority is to attract all the available funding, including the money allocated for combating the pandemic's effects.

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Financial News (4)

Number of active bank cards - 14.1 million

14.1 million cards were active in Romania at the end of March, 77.05% of all the cards issued in the country and a slight drop from the 14.2 million reported at the end of December, 2019, according to the National Bank of Romania (BNR).

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"Noua Casa" program could be beneficial to both developers and clients

The "Noua Casa" program comes with some important elements and, at a time of economic crisis, it can provide some benefits for the construction sector, but also for those who want to buy houses, according to Cristian Paun, chairman of the Board of Directors at the National Loan Guarantee Fund for Small and Medium-sized Enterprises (FNGCIMM)

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Banks to face true crisis after January 1

While Florin Citu, the Minister of Finance, is optimistic and believes that, due to the measures taken by the government, the economic decline will be smaller than analysts believe (2-3% compared to 5-8%) and the recovery will be faster, the heads of major banks in Romania are much more cautious. The economic recovery is being pushed towards 2022-2023, rather than 2021, presuming the Covid-19 pandemic will be kept under control around the world, which is now a doubtful prospect.

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Overdue loans up 1.4% in June

The aggregated value of overdue RON-denominated loans, both retail and corporate, was RON 4.81 billion in June, up 1.4% from the previous month. On the other hand, the value of overdue loans denominated in foreign currencies dropped 4% on a monthly basis, according to the National Bank of Romania (BNR).

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Investment News (1)

EC approves Craiova Regional Hospital project

The European Commission has approved the project for the Craiova Regional Hospital, according to a press release issued by the Ministry of Public Works and Administration (MLPA). This is the third regional hospital project approved by the European Commission, after the ones in Iasi and Cluj. The total value of the project is EUR 156 million.

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Politics (2)

USR-PLUS negotiations with PNL could end in failure

Nicusor Dan, the joint candidate of right-wing parties in Bucharest's mayoral election, said the chances of a successful deal between USR-PLUS and PNL for the district tickets are 50%. Dan admitted that a failure of these negotiations would hurt his own run for the City Hall.

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Potential motion of censure in August

The opposition has already gathered 202 signatures for a possible motion of censure against the Orban Cabinet, which could be introduced next month. The interim president of PSD, Marcel Ciolacu, announced that the Social Democrats will "definitely" introduce the motion of censure against the Cabinet led by Ludovic Orban in August.

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Social (2)

Labor accidents down almost 50% in Q1

A total of 12 work deaths were reported for the first three months of this year. A number of 746 people suffered work accidents in the first quarter of this year, down 48.9% from the corresponding period of 2019, according to data centralized by the Ministry of Labor and Protection Social (MMPS).

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Faget placed under quarantine

The town of Faget (around 6,000 residents) and three outlying villages in the Timis county were placed under quarantine on Sunday, at 7 PM, according to the National Emergency Situations Committee (CNSU). The decision was prompted by the identification of 47 cases of COVID-19.

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