Daily Newsletter - 27 September 2022


Macroeconomic (4)
Financial (3)
Investment (3)
Legislative (2)
European News (1)
Social (1)
IMF has revised upwards its economic growth forecast for Romania for 2022
The International Monetary Fund has revised upwards its economic growth forecast for Romania for 2022, to 4.8%, from the 3.5% level estimated in summer, mainly supported by domestic demand. The IMF also expects the rising energy and food prices to keep inflation high until the end of 2023, according to a press release issued by the Fund. The institution pointed out that the budget deficit had decreased in 2021 and would become slightly consolidated in 2022, amid the growing revenues. The revision of the forecast follows the assessment mission (Consultations on Article IV) carried out by the IMF delegation in the summer of 2022.
Energy and inflation crises risk causing recession in major economies
Global economic growth is slowing more than anticipated a few months ago as energy and inflation crises risk causing recession in major economies, according to a report published by the Organization for Economic Cooperation and Development (OECD). While the world economy is still expected to grow by 3% this year, the Paris-based organization has reduced its forecast for 2023, to 2.2%, from a 2.8% level forecast in June. Europe’s outlook is particularly pessimistic, warns the OECD, as it is the most economically exposed to the negative effects of Russia’s invasion of Ukraine. Global GDP is expected to be USD 2.8 trillion lower in 2023, than the OECD forecast before Russia’s aggression against Ukraine, a decline in economic output equivalent to the size of the French economy.
Global trade resumed growth in the second half of the year
The annual growth rate of global trade volume accelerated to 6% in July 2022, from 4.6% in the previous month, amid a 0.7% monthly increase, following a 0.6% decline in the previous month, according to the latest World Trade Monitor report published by the Dutch institute CPB. Global imports accelerated their annual growth to 6.9%, from 5%, amid a 0.9% monthly increase, and exports’ annual growth reached 5.1%, from 4.1%, amid a 0.4% monthly increase.
The execution of the general consolidated budget ended with a RON 32.98 billion deficit
The execution of the general consolidated budget in the first eight months of 2022 ended with a RON 32.98 billion deficit, down from the RON 39.36 billion deficit recorded in the same period of 2021, the Ministry of Finance has announced. Expressed as a percentage of the Gross Domestic Product, the budget deficit decreased by 0.93% in the first eight months of 2022 compared to the similar interval of 2021, from 3.33% of GDP to 2.40% of GDP.
In the summer of 2022, companies rediscovered cheaper foreign currency-denominated loans
In the summer of 2022, companies rediscovered the cheaper foreign currency-denominated loans, amid the growing interest rates on RON-denominated ones. As a result, corporate foreign currency-denominated loans grew by about 27% in August 2022 year-on-year, an almost double growth rate compared to the one at the beginning of the year. In January 2022, corporate foreign currency-denominated loans increased by 15% compared to January 2021. Moreover, the growth rate of corporate RON-denominated loans remained relatively constant in the first six months of this year, at around 27%, and slowed down to 25% in August.
Banca Transilvania has launched instant euro payments settlement
Banca Transilvania has launched instant euro payments settlement, a free service allowing individuals and legal entities to instantly receive money from one of the banks in Europe, part of the TIPS (Target Instant Payment Settlement) system. BT is the only bank in Romania that offers this facility to clients. Banca Transilvania’s clients can track the payments through Neo and BT 24. Instant payments were launched in Romania three years ago by Transfond, Banca Transilvania and CEC Bank, meaning the possibility to transfer RON, in real time and 24/7, to the other Romanian banks that have joined this system.
Uniqa Asigurări is entering the guarantee insurance segment
Uniqa Asigurări is entering the guarantee insurance segment to primarily serve existing clients in the company’s portfolio, so that they can benefit from insurance solutions on the non-motor segment as well. The company’s clients have constantly requested that Uniqa should offer guarantee insurance solutions, considering that the volume of underwritten premiums for this line of insurance has been dropping on the market. In terms of sales targets, Uniqa aims to reach EUR 3 million underwritten premiums over the next three years, and this insurance segment has the potential to generate 3-5% of the volume of premiums for the corporate area.
Retail market expects about 500,000 new sqm to be delivered over the next three years
The retail market expects about 500,000 new square meters to be delivered over the next three years, mostly in retail park projects, and shopping centers could soon be outranked by this type of commercial spaces development if this trend continues, according to an analysis made by Fortim TA, a member of the BNP Paribas Real Estate Alliance. In 2019, before the Covid-19 pandemic, developers had delivered retail parks with a total area of 62,890 square meters.
PepsiCo invests USD 100 million in Star Foods potato chip plant near Bucharest
PepsiCo, one of the biggest players on the soft drinks and snacks market, has announced a USD 100 million investment in three operational production lines and a new automated warehouse, automation capabilities and a new master plan at its plant in Popești-Leordeni. The investment would be finalized by 2024 and would result in the doubling of production capacity. These new investments come after the finalization, in 2021, of the five-year development plan implemented in the soft drinks plant from Dragomirești, worth a total of USD 40 million.
Alibaba to invest USD 1 billion over the next three years
Alibaba will invest USD 1 billion over the next three years to support its cloud computing service customers as the Chinese e-commerce giant is trying to reignite growth after a record slowdown. The investment will consist of financial and non-financial incentives, such as funding, rebates and go-to-market initiatives. The company is also setting up a program to help its customers localize their cloud computing business needs depending on the market.
Illegal entry or stay on Romania’s territory of certain persons will no longer be punished
Ministry of Justice has initiated a draft law that could generate a major change in the system for granting asylum in Romania and illegal border crossings. Thus, according to the sole article of this normative act, which aims to amend Article 11 of Law 122/2006 on asylum granting in Romania, the acts of illegal entry or staying on Romania’s territory committed by persons who have been granted a form of protection shall not be punishable.
Parliamentary Committee for Justice Laws resumed debates on judges and prosecutors’ statute
The Special Parliamentary Committee in charge of the Justice Laws resumed debates on the draft law regarding judges and prosecutors’ statute on Monday, 26 September. Last Thursday, 22 September, MEPs had debated about a third of the draft law’s articles, and most amendments had been rejected. Only a few formal and correlation amendments had been approved by the committee, from among those formulated by the Superior Council of Magistracy (CSM) and taken over by the AUR, PSD, PNL, UDMR and national minorities groups.
European News 
EU weighs options for Russian draft dodgers
European Union countries started discussing on Monday (26 September) how to treat Russians trying to get into the bloc to avoid President Vladimir Putin’s call-up for the war in Ukraine. The number of draft-age men heading abroad since Putin called up 300,000 reservists on Wednesday has posed a dilemma for EU members, particularly eastern states, that had been limiting Russians’ access in response to the war. It has also raised fears of increased traffic and possible security risks at frontiers. European Union members Latvia, Lithuania and Estonia, which border Russia, already said they will not offer refuge to any Russians fleeing Moscow’s mobilization of troops.
More than half of Romanians looking for a job have unrealistic salary expectations
The labor market is facing shortages on all levels, from cleaning personnel, to specialists (architects, engineers, sales consultants, accountants) to middle and top management. While about 65% of candidates have unrealistic salary expectations, employers are willing to increase their budgets, but candidates’ skills need to match their demands. While 42% of employees say they need a pay rise, only 18% of employers share this view, according to a survey conducted by EY at global level.