Daily Newsletter - 27 May 2022


Macroeconomic (3)
Financial (3)
Investment (3)
Legislative (3)
European News (1)
Social (1)
Head of World Bank has warned that Russia’s invasion of Ukraine could cause global recession
The head of the World Bank has warned that Russia’s invasion of Ukraine could cause global recession as food, energy and fertiliser prices will grow. He has added that the blockages in China amid the coronavirus outbreak are adding to concerns over economic slowdown. His comments are the latest warning about the growing risk that the global economy is on the verge of a downturn.
The Institute of International Finance has halved its 2022 growth outlook for global output
The Institute of International Finance has halved its 2022 growth outlook for global output, citing the economic effects of Russia’s invasion of Ukraine, China’s response to a COVID-19 wave and tighter monetary policy in the United States, Reuters reports. Moreover, the Institute also expects capital flows to emerging markets to shrink by 42% from last year. Based on its new estimates, the global banking trade group has indicated that recession risk has risen as true growth is expected to stagnate.
Financial analysts reduced their economic growth estimates to 2.3% in April
Financial analysts from CFA Romania association expect the Romanian currency to depreciate to an average exchange rate of RON 5.0584/EUR 1 over the next 12 months, and inflation rate to reach an average of 8.43%, a new record high since CFA started conducting the monthly survey, more than a decade ago. Data collected by CFA in April show that more than 82% of analysts included in the monthly survey anticipate an exchange rate of RON 5.0048/EUR 1 for the six-month horizon.
Ministry of Finance borrowed RON 615 million from banks on Thursday
The Ministry of Finance borrowed RON 615 million from banks on Thursday, 26 May, through an auction of government bonds with a nominal value of RON 300 million, maturing in 2034, at an interest rate of 7.95% per year. Seven primary dealers participated in the auction. The total value of demand was RON 906 million, of which banks bid RON 736 million on their own behalf. The coupon rate was 4.75% and the yield upon maturity corresponding to the auction price was 7.95%.
Banca Transilvania supplemented the number of shares it will repurchase by the end of the month
Banca Transilvania (stock exchange symbol TLV), the largest credit institution in Romania, announced on Thursday evening, at Bucharest Stock Exchange, that the members of its Board of Directors had decided on 25 May to supplement the number of shares set by the bank on 16 May by a maximum of 4 million shares. They will be repurchased at a minimum price equal to the BSE market price at the time of the acquisition and a maximum price of RON 4, according to daily trading prices on BSE, valid during the repurchase period. The share repurchase program will run until 31 May 2022.
Romanian entrepreneurs can apply for financing from BCR within SME Prod governmental program
Romanian entrepreneurs can apply for financing from Banca Comercială Română (BCR) within the governmental program SME Prod, which has been operational since Wednesday, 25 May. The program aims to finance production, the increase in production capacity, reconversion from intermediation to production, as well as activity digitalization and improvements in environmental standards.
Cumpăna has opened the third water bottling plant within the water cooler system
Cumpăna 1993, one of the biggest players on the watercooling systems market, has opened its third plant in Ștefăneștii de Jos locality, Ilfov County. The unit has a bottling capacity of 360,000 bottles per month and involved an over EUR 3 million investment. The company’s old plant was located in Vulpachii-Lipoveanca, also in Ilfov County. Cumpăna also has a plant in Timiș County and another one in Sălaj County.
Policolor-Orgachim plans to invest over EUR 16 million in the following period
Paints and lacquers manufacturer Policolor-Orgachim plans to invest over EUR 16 million in the following period, part of the money being dedicated to expanding production capacities in Romania. Of this amount, around EUR 4 million is earmarked for Romania and the rest for Bulgaria. Policolor-Orgachim Group recorded a RON 79.3 million turnover in 2021, up by 24% year-on-year, while EBITDA increased by 116%, to EUR 4.3 million.
eMAG Group invests RON 2.2 billion in development of regional e-commerce ecosystem
eMAG Group has presented the balance for its RON 3.2 billion three-year investment plan launched in 2021. Investments exceeded RON 1 billion in the first year and eMAG Group will continue to invest RON 2.2 billion in its plan over the next two years, for the development of a regional e-commerce ecosystem, according to a press release. The cited source also indicates that, following the investments made in 2021, eMAG group recorded a RON 9.57 billion turnover in 2021, of which eMAG’s revenues in Romania represented RON 5.68 billion. Dante International SA, the company which includes eMAG Romania, Fashion Days Romania and which manages sales for eMAG Bulgaria and eMAG Hungary, has reported a RON 7.346 billion turnover for 2021.
Olympic students in private schools will receive performance scholarships
Pupils who study in private schools will be eligible for performance scholarships, according to an announcement by the Education Minister. He stated, during a press briefing after Thursday’s government meeting that the draft Emergency Ordinance amending and completing National Education Law 1/2011 had been adopted. The performance scholarship is RON 500, the Minister added.
A draft law on food waste has been tabled in Parliament
A draft law on food waste was submitted in Parliament on Thursday by Save Romania Union (USR) MP Diana Buzoianu, who announced that over 100 MPs had joined the initiative and had signed in support of the draft law. The latter mainly aims to reduce food waste in Romania by 50% by 2030. Romanians throw away 2.55 tons of food every year, which means that 7 tons of food are wasted every day.
MIPE has published the draft Government Emergency Ordinance for investment grants
On Wednesday, the Ministry of European Projects and Investment (MIPE) put up for public consultation the draft Emergency Ordinance that will regulate the provision of grants for investments in productive activities. By publishing this draft, MIPE responds to requests from the business environment, as this measure has been much awaited by SME representatives, given that the first steps towards the provision of investment grants had been made in 2020. The draft normative act targets the urgent adoption of support measures in the form of investment grants necessary for service provision capacities and for technological upgrades, in accordance with the legal provisions in the field of de minimis aid and state aid.
European News 
Romania is ready to leave Russia-led investment banks
The Romanian government decided on Wednesday to announce its intention to leave the International Bank for Economic Co-operation (IBEC) and the International Investment Bank (IBB), both of which count Russia as a main shareholder. IBEC provides targeted support for export-import operations between member states, which include EU’s Bulgaria, Czechia, Poland, Romania and Slovakia, alongside the Russian Federation, Mongolia and Vietnam. Founded in 1963, the bank of former socialist states had, at the end of 2021, assets of €776 million. In April, Fitch Ratings withdrew IBEC’s ratings due to a lack of information.
Education Minister says health crisis has generated an educational catastrophe
Education Minister Sorin Cîmpeanu has stated that the health crisis generated "an educational catastrophe" in Romania and in any country, emphasizing the importance of financial resources for good quality education. The statement was made during the conference "The role of Romanian higher education in European Higher Education and Scientific Research Area", organized by DC News at the University of Agronomic Sciences and Veterinary Medicine, where the minister reiterated the fact that the salary of a junior teacher must start from the average wage economy in order to be motivating enough.