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, 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 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.
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 (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 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 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.
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 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.
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 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.
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.
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 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.