News

Daily Newsletter - 27 June 2022

Summary

FIC (3)
Macroeconomic (3)
Financial (3)
Investment (3)
Legislative (2)
European News (1)
Social (3)
FIC 
Foreign Investors Council has re-elected the organization’s management team

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.

Cristian Secoșan, new term of office of FIC president

Cristian Secoșan, Ramona Jurubiță, Eric Stab and Daniel Anghel, the people who lead the FIC

Cristian Secoșan, new term of office of FIC president

Business organizations and bilateral chambers send a common message on fiscal measures

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.


Investors oppose progressive taxation

The business community wants to maintain the single tax rate

11 business organizations in Romania demand the maintenance of the single quota, but the reduction of state expenditures
Business environment recommendations for fiscal measures
The business environment requires maintaining a single quota

Foreign investors do not want to give up the single share

Business environment, appeal to the Government on fiscal measures. It is required to maintain the single tax rate

The business environment requires the Government to maintain the single tax rate. What fiscal measures do Romanian entrepreneurs

Investors oppose progressive taxation

Investors oppose progressive taxation

The business environment requires maintaining a single quota

Fiscal measures proposed by the business environment: maintaining a single tax rate, reducing tax evasion

Fiscal measures proposed by the business environment: increasing tax collection, maintaining a single tax rate

11 business organizations in Romania demand the maintenance of the single quota, but the reduction of state expenditures

The single tax rate must be maintained, say business representatives!

Foreign investors in Romania oppose giving up the single tax rate: ’It has brought prosperity and created jobs’

The business environment opposes the renunciation of the single tax rate: It represents one of the main competitive advantages

The business environment recommends maintaining the single rate and the real reduction of tax evasion

The business community recommends maintaining the single quota, reducing tax evasion and harsher sanctions

Business environment proposals: maintaining a single tax rate, reducing tax evasion, increasing tax collection

Fiscal measures proposed by the business environment: maintaining a single tax rate, reducing tax evasion, increasing tax collec

Fiscal measures proposed by the business environment

Business representatives recommend maintaining a single tax rate

Fiscal measures proposed by the business environment: maintaining a single tax rate, reducing tax evasion, increasing tax collec

Fiscal measures proposed by the business environment: maintaining a single tax rate, reducing tax evasion, increasing tax collec

Foreign investors OPPOSE the waiver of the single tax rate: "It has brought prosperity!"

The business environment proposes maintaining a single quota

The business environment recommends maintaining a single quota

The business environment requires the Government to maintain the single quota and reduce tax evasion

Fiscal measures proposed by the business environment: maintaining a single tax rate, reducing tax evasion, increasing tax collec

The business environment comes with real fiscal measures, not imitations of… 50 money

The single tax rate must be maintained, say business representatives!

The business environment message

The business environment message

The business environment message

The business environment requires the government to maintain the single quota, increase tax collection


Romania attracted EUR 7.25 billion foreign direct investments in 2021

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.

NEWS.RO CONFERENCE - Daniel Anghel: Romania has been among Europe’s tigers in attracting foreign direct investment, the largest

NEWS.RO CONFERENCE - Daniel Anghel: Romania has been among Europe’s tigers in attracting foreign direct investment, the largest

Macroeconomic 
NBR has published its June 2022 Financial Stability Report
Financial markets have been marked by significant uncertainties stemming from the conflict between Russia and Ukraine, by the developments on energy markets, but also by the tightening financial conditions, mainly due to the rising inflation in both emerging and developed economies, particularly amid significant increases in gas and electricity prices and bottlenecks in supply chains, according to the National Bank of Romania’s June 2022 Financial Stability Report. The interbank money market saw rising interest rates, compared to previously reported evolutions.
The consolidated general budget deficit grew to 1.57% of GDP
The consolidated general budget deficit grew to 1.57% of the Gross Domestic Product after the first five months of 2022, from 1.23% of GDP in January-April, according to data published by the Ministry of Finance. However, the negative balance decreased by about 0.65% compared to the similar period of 2021, when the budget had ended the first five months with a deficit of 2.22% of GDP. The evolution is explained through an increase in total revenues by 1.01% of GDP - mainly influenced by VAT revenues, other taxes on goods and services and non-tax revenues, while budget expenditure was up 0.37% of GDP - mainly due to social assistance and interest expenditure.
More than one third of CEOs in CEE expect dropping turnovers in 2023
CEOs in Central and Eastern Europe (CEE), including Romania, are more concerned than their global counterparts about the risks companies are currently facing, such as competition, operating model, cybersecurity or the geopolitical context, but, at the same time, they act and spend less to mitigate them, according to PwC’s Global Risk Survey 2022 report. Concern about the impact of risk can be seen from one of the survey’s key findings, with 36% of respondents in the region expecting their revenues to fall over the next year due to risks, compared to just 15% at global level.
Financial 
Current level of monetary policy interest, of 3.75%, remains far behind inflation
The current level of the monetary policy interest, of 3.75%, continues to be far behind the evolution of inflation and of the risk premium for Romanian assets, and will most likely reach 7% by the end of the year, according to OTP Bank analysts. Projections for 2023 are pessimistic, with a lower expected result. All areas are affected at the moment, given the inflation, trade, real income, interest rates or fiscal consolidation, which has now stopped, according to the analysts.
Raiffeisen Bank listed third green bonds issue on BSE
On Friday, 24 June 2022, Raiffeisen Bank listed a new green bonds issue on Bucharest Stock Exchange (BVB) worth RON 525 million. The bonds, which will be traded under the stock exchange symbol RBRO27, represent the third green bonds issue that Raiffeisen Bank has listed on BSE, after the two issues in 2021, the total value of the three listed issues exceeding RON 2 billion. The non-preferred senior green bonds to enter trading on 24 June have five-year maturity and a fixed annual interest rate of 8.927% per year. Raiffeisen Bank has issued and sold to 13 corporate bondholders a total of 1,000 corporate bonds with a nominal value of RON 525,000.
BSTDB increased its loans and investments portfolio to nearly EUR 2.4 billion in 2021
The Black Sea Trade and Development Bank (BSTDB), whose shareholding Romania is part of, increased its loans and investments portfolio by 14.6% in 2021, to nearly EUR 2.4 billion. The bank continued to record a profit, for the 17th consecutive year, its net result having stood at EUR 43.9 million, compared to a EUR 14.2 million gain in 2020. After having responded to the pandemic in 2020, when its operational activity had focused on supporting existing clients and on providing financing to companies facing the impact of the economic downturn, the bank returned to a more varied approach in 2021, helping firms resume the deferred investments or expand to take advantage of the new opportunities, according to BSTDB.
Investment 
An over RON 10 million investment will be made at the Clinical Recovery Hospital in Cluj
Cluj County Council has launched the tender for the rehabilitation, expansion and modernization of electrical power, ventilation and air treatment and medical fluids installations at the Clinical Recovery Hospital, the estimated value of the contract being nearly RON 11 million. The works will be carried out within the framework of the European funded project won by the County Council, aimed at "Increasing the safety of patients in Cluj-Napoca hospitals using medical fluids".
Over 3,800 households in Bihor County to be connected to the natural gas distribution network
More than 3,800 households in three communes in Bihor County will be connected to the natural gas distribution network. The implementation of this project worth more than RON 78 million will involve expanding the gas distribution network by 135 kilometers, as announced the Ministry of European Projects and Investments. Investments for the development of communities will thus continue during the 2021-2027 programming period.
EDP plans to invest EUR 1.5 billion in renewable wind power projects in the ocean by 2025
EDP plans to invest EUR 1.5 billion in the development of renewable wind power projects in the ocean by 2025, reinforcing its commitment to accelerate the energy transition, including through offshore wind farms. This week, the group will attend the Ocean Conference promoted by the United Nations (UN) to announce its investment strategy and sustainability commitments on this segment. According to EDP’s Strategic Plan presented in 2021, the Group will contribute EUR 1.5 billion to support the wind power capacity growth targets set by Ocean Winds (OW) – a joint venture owned 50/50 by EDPR and Engie - a leader in the offshore floating platforms industry.
Legislative 
Government adopted an OUG aimed at reducing the personnel deficit in hospitals
During the meeting on Thursday, 23 June 2022, the Government adopted a Government Emergency Ordinance (OUG) aimed at reducing the personnel deficit in hospitals and at keeping the residents involved in the management of the COVID-19 pandemic in the healthcare system. Thus, residents who did not take the specialization exam can be hired based on an employment contract for maximum one year after the end of their training period, and the salary will be similar to the one corresponding to the last year of training.
National Liberal Party proposes new draft law
Several MPs from the National Liberal Party (PNP) have proposed, in a draft law submitted to Parliament, granting vouchers to primary school children for eye check-ups and for the purchase of glasses. The draft law, signed by eight Liberal MPs, regulates the framework for granting such vouchers to primary school pupils, under the conditions and with the exceptions stipulated by Law no. 227/2015 regarding the Fiscal Code. According to the draft law, "the State shall finance, through the National Health Insurance House (CNAS), from the State Social Security Budget, the equivalent value of vouchers for ophthalmology check-ups for primary school pupils, through a voucher worth 0.4 ISR per year per child".
European News 
EU leaders met to prepare for further cuts in gas supplies from Russia
EU leaders met on Friday, 24 June to prepare for further cuts in gas supplies from Russia, limit the impact on inflation, and seek alternative supplies. They accused Moscow of "weaponising" energy via a supply squeeze that Germany warned could partly shut its industry. The leaders of the 27 EU nations will place the blame for a massive spike in prices and sagging global growth on the war that began exactly four months ago.
Social 
Total average income stood at RON 5,683 per month per household in 2021
Total average income, in nominal terms, stood at RON 5,683 per month per household and at RON 2,243.4 per person, up by 8.9% and 10.5% respectively against 2020, according to data centralized by the National Institute of Statistics. The main source of total income formation was, both in 2021 and 2020, cash income (93.5%, up by 0.7% year-on-year). In 2021, the share of income in kind was 6.5% of total household income, down by 0.7% compared to 2020, on account of the equivalent value of consumption of agri-food products from own resources (5.4%, down by 0.7% against the previous year). The latter are food and non-food products of agricultural origin that enter household consumption from own production, from stock, as well as from those received for work carried out in other households or received as gifts from relatives, friends or others.
Taxes and social security contributions accounted for 33.2% of total household expenditure
Taxes on income, contributions to social security budgets, as well as other taxes and charges accounted for 33.2% of total household expenditure in 2021, amounting to a monthly average of RON 1,620 per household. Of these, salary taxes represented 15% (14.8% in 2020) and social security contributions (for pension, unemployment fund and health insurance) accounted for more than half, 84.3% (84.5% in 2020) of total taxes, according to data centralized by the National Institute of Statistics.
Unemployment rate registered in ANOFM records in May 2022 is 2.55%
Unemployment rate in Romania was 2.55% at the end of May 2022, 0.02% lower than in the previous month and 0.51% lower than in May 2021. The total number of unemployed at the end of May 2022 stood at 222,648 persons, 2,172 fewer than at the end of the previous month. Of the total registered unemployed, 38,970 received unemployment benefits and 183,678 did not receive such sums. The number of unemployed who received unemployment benefits decreased by 2,836 persons, while the number of unemployed who did not receive such sums increased by 664 persons compared to the previous month.