News

Daily Newsletter - 4 August 2022

Summary

Macroeconomic (3)
Financial (4)
Investment (3)
Legislative (4)
European News (1)
Social (1)
Macroeconomic 
Romania ranks last in EU in terms of budget allocations for research and development in 2021
Budget allocations for research and development in the European Union stood at EUR 244 per person in 2021, up by 33% compared to 2011, but Romania ranks last among Member States, with only EUR 19 per person, up by 8.5% compared to the EUR 17.5/person level recorded in 2011, according to data published by Eurostat on Wednesday, 3 August. The highest budget allocations for R&D were recorded in Luxembourg (EUR 689 per person), Denmark (EUR 530 per person) and Germany (EUR 471 per person). At the other end of the classification, the lowest budget allocations for research and development are in Romania (EUR 19 per person), Bulgaria (EUR 24 per person), Latvia (EUR 45 per person) and Hungary (EUR 60 per person).
Romania to submit second payment request on PNRR this autumn
The Ministry of Investments and European Projects has announced that in autumn, Romania will submit to the European Commission the second payment request corresponding to the National Recovery and Resilience Plan (PNRR), which includes the targets and milestones that had to be achieved by Q1 and Q2 of 2022. The payment request includes a total of 51 targets and milestones and, according to the EC Regulation, the payment procedure requires the EC inter-service endorsement for issuing the preliminary positive opinion, transmitting the payment request to the ECOFIN Council’s Specialized Committees and the payment being approved within the Council of the European Union -ECOFIN.
Retail trade turnover grew by 5.2% in the first six months of 2022
Retail trade turnover, the main barometer for private consumption, grew by 5.2% as a gross series in the first six months of 2022, compared to the similar period of 2021, following the 9.6% increase in fuel sales, the 6% advance of non-food sales and the 2% higher sales of food products, beverages and tobacco sales, according to data published by the National Institute of Statistics (INS) on Wednesday. The evolution illustrates a slowdown in the growth pace, after consumption had increased by 5.7% in the first five months of 2022.
Financial 
BCR launches solution for contactless payments via Xiaomi smart devices
Banca Comercială Română clients, holders of Mastercard debit or credit cards, will be able to make contactless payments with the help of Xiaomi smart devices as well. The NFC function will be available on the Mi Smart Band 6 NFC fitness bracelet, as well as on the Xiaomi Watch S1 and Xiaomi Watch S1 Active smartwatches. Gabriel Fârtat, Go to Market Manager AioT at Xiaomi Romania, believes that the range of wearables will be essential for the payments ecosystem. Moreover, Ana Pochi, Account Management Director at Mastercard Romania, has stated that the new versions of Xiaomi wearables improve the physical-digital interaction and now offer, in addition to the classic functions, the possibility to make contactless payments.
Alpha Bank recorded a EUR 18.2 million gross profit in H1 of 2022
Alpha Bank, one of the ten biggest banks on the Romanian market asset-wise, recorded a EUR 18.2 million gross profit in H1 of 2022, up by 71.6% year-on-year. The institution’s loanS portfolio had exceeded EUR 2.8 billion on 30 June, having marked a 7.0% annual advance, while deposits attracted from clients stood at about EUR 2.7 billion, up 5.1% year-on-year
BRD Group’s net profit amounted to RON 617 million in H1 of 2022
BRD Group’s net profit amounted to RON 617 million in H1 of 2022, down by 1.44% against the RON 626 million profit recorded in the first half of 2021. Moreover, return on equity (ROE) stood at 15.6% in the first six months of 2022, compared to 12.6% in H1/2021, according to a press release issued by the bank. BRD’s capital adequacy ratio was 21% on 30 June 2022, reflecting a strong capital position.
Stup platform recorded about 1,000 opened accounts one week after its launch
One week after the launch of the platform, Stup, Banca Transilvania’s project dedicated to small businesses, has recorded about 1,000 accounts opened by current and future entrepreneurs. During this period of time, the first business was also set up, namely a small business in the field of online services for a car fleet, the first customer management solution was acquired by a travel agency, the first e-signature for an e-commerce business was obtained and the first online campaign for the promotion of a business in the spices sale area was carried out.
Investment 
Wine producer Purcari has installed a photovoltaic system on its production unit
Purcari (stock exchange symbol WINE), a wine producer whose shares are included in the structure of the BET index, has announced the installation of a photovoltaic system on the roof of Purcari winery’s production unit, a decision that is in line with the objectives of its ESG (environmental, social and corporate governance) agenda regarding commitment to sustainability. In a report published on Bucharest Stock Exchange, the company indicates that it will continue to invest in sustainability, aiming to cover up to 80% of its energy consumption from resources generated by the photovoltaic station.
Dyson has opened its first pop-up store in Romania, located in Bucharest
Dyson has opened its first pop-up store in Romania, located in AFI Cotroceni shopping center in Bucharest. The store has an area of 18 square meters and offers a wide range of home cleaning, air purification and hair care products. In the pop-up store, customers can see and test many of the brand’s products, including vertical vacuum cleaners, hair care products and air purifiers, all based on the latest technology. Every customer who wants to test and interact with Dyson products is accompanied and guided by the store’s personnel, specially trained to present the Dyson technology and provide all the necessary information about each product’s features.
Local investments market grew by more than 40% in H1/2022
The volume of investments in Romania grew to EUR 518 million in H1 of 2022, compared to EUR 360 million in the same period of 2021. Moreover, the volume of investments has also increased compared to previous years, even to those preceding the COVID-19 crisis - it recorded values between EUR 320 and 430 million in the first half of the year during the interval 2018-2021. At European level, the investments market is on stand-by, as inflation and the volatility of building material prices are generating uncertainty, and some of the players involved in this market have postponed making purchase decisions due to a lack of predictability, according to the latest report by Savills, Crosspoint Real Estate’s international associate in Romania.
Legislative 
Government updated master’s degree study fields and programs in higher education institutions
The Government has approved the updates regarding master’s degree study fields and programs in higher education institutions, through a resolution amending Annexes 1 and 2 of Government Decision 434/2022 on the accredited master’s degree study fields and programs and the maximum number of students that can be enrolled in the academic year 2022 - 2023. The newly approved amendments were made following the decisions adopted by the Romanian Agency for Quality Assurance in Higher Education (ARACIS) during the period February 2022 - July 2022.
Government has adopted the draft law amending and completing Law 85/2018
Energy Minister Virgil Popescu has announced that the Government has adopted the draft law amending and completing Law 85/2018 on the establishment and maintenance of minimum crude oil and/or petroleum product reserves, which transposes a European directive that changes the method of calculating stocks and storage obligations, as each EU Member State must store energy reserves, crude oil reserves. For example, the level of minimum stocks will be at least the higher value between the quantity of net imports over a 90-day period, calculated based on the daily average of net imports, and the quantity corresponding to domestic consumption over a 61-day period, calculated based on the daily average of domestic consumption.
Government has approved an OUG on the functioning of foreign representations in Romania
The Ministry of Entrepreneurship and Tourism has announced that on Wednesday, 3 August, the Romanian Government adopted the Ordinance on the authorization and functioning of foreign companies and economic organizations’ representations in Romania. The legal framework for the creation of a dedicated electronic application has been created in order to simplify and digitalize the procedure for the registration of foreign representative offices in Romania, as well as for the extension and modification of their operating permits and for their de-registration from the Ministry of Entrepreneurship and Tourism (MAT)’s records.
Ciucă Government proposes implementing a draft law on military personnel’s status
The budgetary impact of a draft law on military personnel’s status that was discussed on Wednesday, 3 August 2022, exceeds RON 2.7 billion over the next five years, according to the Government’s agenda, Economedia reports. The budgetary impact is generated by salary expenditure, according to the substantiation note accompanying the draft law. The budgetary impact shows a constant increase in military personnel’s salary expenditure from 2023 (RON 346 million) until 2026 (RON 848 million).
European News 
Driest July in memory imperils Europe’s crops
As much of Europe bakes in a third heatwave since June, fears are growing that extreme drought driven by climate change in the continent’s breadbasket nations will dent stable crop yields and deepen the cost-of-living crisis. The European Commission on Wednesday (3 August) urged EU member states to re-use treated urban wastewater as irrigation on the continent’s parched farms after France and parts of England saw their driest July on record.
Social 
The value of aid granted to people affected by extreme weather phenomena has been increased
The Ministry of Labor and Social Solidarity has announced that the government has increased by an average of 50% the value of emergency aid that will be granted to families or single people affected by floods, landslides or dangerous weather phenomena this year. The measure adopted on Wednesday, 3 August, was taken in response to the up to 80% increase in the construction cost index, according to the latest statistical price bulletin released by the National Institute of Statistics.