Daily Newsletter - 3 June 2021


Macroeconomic (3)
Financial (3)
Investment (3)
Legislative (1)
European News (1)
Social (2)
EC calls on Romania to reduce its budget deficit to less than 3% of GDP within the next three years
The European Commission has called on Romania to reduce its budget deficit to less than 3% of GDP within the next three years, to freeze public expenditures, and to draw up a strategy to achieve these goals by 15 September, according to the recommendations published by the European Executive yesterday. Prime Minister Florin Cîţu stated that the fiscal-budgetary strategy announced by the Government, with the return of the budget deficit below 3% in 2024, had been accepted as the main strategy by the European Commission.
Economy will grow at a sensibly more alert pace in 2021-2022
Economic sentiment in Romania grew in May, for the sixth consecutive month, by a monthly rate of 2.6 points, having reached 104.1 points, compared to 101.5 points in April and 90.8 points in February, according to the Economic Sentiment Indicators (ESI) calculated by the European Commission. The value recorded last month is the highest one since February 2020, and the successive advances indicate that local managers expect economic activity to accelerate in Q2 of this year.
Industrial producer prices have increased
Industrial producer prices (domestic market and foreign market) grew by 7.9% in April 2021 compared to the similar period of the previous year, according to data published by the National Institute of Statistics (INS) yesterday. Moreover, industrial production prices were up 1.2% in April, compared to March 2021.
New RON-denominated corporate lending slowed in April
Banks on the Romanian market granted approximately RON 3.5 billion new RON-denominated corporate loans in April 2021, down by RON 1.1 billion (24.1%) compared to the level recorded in March 2021. Corporate lending slowed down after having reached the second monthly record high of the past 14 years in March this year, of over RON 4.6 billion. The highest monthly volume of RON-denominated corporate loans, of RON 4.7 billion, had been recorded in December 2020.
NBR’s foreign exchange reserves decreased in May
National Bank of Romania’s foreign exchange reserves stood at EUR 37.57 billion on 31 May 2021, compared to EUR 38.304 billion on 30 April 2021. EUR 759 million worth of inflows representing changes in credit institutions’ foreign currency-denominated required reserves, inflows into the Ministry of Finance’s accounts, inflows into the European Commission’s account and other were recorded during the month.
Banca Transilvania has bought Idea Bank
Banca Transilvania, the biggest bank in Romania, announced yesterday that it was to acquire the entire stake held by Getin Holding Group at Idea Bank and that the contract was to be signed sometime during the day. The transaction includes the companies part of Idea Bank Group in Romania, namely Idea Leasing IFN SA and Idea Broker de Asigurare SRL, and its value amounts to about EUR 43 million.
One Tower building in Floreasca area will have an "office hospitality" center
The One Tower building in Floreasca area of Bucharest will have an "office hospitality" center, the first such center on the Romanian market. The One space, created by a group of investors not related to One United, was developed following a EUR 4 million investment and will become operational in autumn.
An investment for a wind farm will start in Dobrogea
WEP Technology Investment is the latest project company to have received a technical approval for connection to the power grid for a 48 MW wind farm in Pecineaga Commune, Constanţa County. The approval was granted by the Italians from E-Distribuţie Dobrogea, a company that is part of the Enel Romania group and which manages the power distribution network in the south-east of Romania. The investment in this wind farm would amount to about EUR 70 million.
Construction company Bog’Art has started developing Art City
Construction company Bog’Art announced yesterday that it had started developing Art City, a luxury residential project in the north of Bucharest, worth EUR 20 million. The real estate project includes 141 apartments, 500 square meters of commercial spaces and 180 parking spaces, which will be delivered in October 2022.
Senate rejects project eliminating subsidies granted to political parties from the state budget
Yesterday, senators rejected a project initiated by the MPs from the Alliance for Romanians’ Unity (AUR), which aimed to repeal certain provisions of Law 334/2006 on the financing of political parties’ activity and election campaigns, by eliminating subsidies granted to political parties from the state budget, in order to use these amounts "to cover social needs". The rejection report drawn up by the specialized committee indicates that this funding functions at European level as well and that relating to certain constitutional provisions is also necessary.
European News 
The European Commission is set to borrow about EUR80 billion
The European Commission is set to borrow about EUR80 billion ($97.76 billion) this year in long-term bonds to finance the European Union’s plan for economic revival after the pandemic, the EU executive said on. The Commission said the borrowing, to begin later in June, would be topped up with tens of billions of euros of short-term EU-Bills to cover the remaining financing requirements, adding it would update its funding plan in September.
Labor market is showing recovery signs after the pandemic
The labor market is showing recovery signs, after a year during which companies and working methods had to be reinvented to adapt to the new pandemic context. Over 4,000 new candidates filled in resumes on the BestJobs platform in May, looking for a job opportunity. Moreover, companies have also been increasingly active and alert in the recruitment process, the number of potential candidates contacted by companies having been three times higher in May than in April.
PNRR provides for the allocation of EUR 3.6 billion for Educated Romania
The National Recovery and Resilience Plan (PNRR) provides for the allocation of EUR 3.6 billion for Educated Romania. Targeted reforms include the development of an inclusive and good quality early education system and a reformed baccalaureate. The investments stipulated in PNRR include 1,800 green minibuses for student transport, 75,000 classrooms equipped with furniture, 20,000 recreation and reading places, 20,000 newly created accommodation places on university campuses.