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.
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.
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 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 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, 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 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.
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, 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 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.
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.
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 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.
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