News

Daily Newsletter - 4 February 2021

Summary

Macroeconomic News (3)

PM: The deficit target is closer to 7% than 7.2%

Prime Minister Florin Cîţu stated that this year's budget will be sent to the Parliament next week. The PM added that the total funds earmarked for investments will increased compared to the previous year, even though the 2020 budget featured a record amount allocated to investment projects, and noted that the deficit target in this budget is closer to 7% than to 7.2%.

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Exporters urge Cabinet to unfreeze PPE

Several employer organizations representing Romanian exporters urged the Minister of Economy, Entrepreneurship and Tourism, Claudiu Năsui, to unfreeze the Export Promotion Program (PPE), through which Romanian SMEs receive support for attending international fairs and exhibitions. Mihai Ionescu, President of the National Association of Romanian Exporters and Importers (ANEIR), pointed out that Romanian SMEs benefiting from this program bring more money to the state budget.

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Hotel occupancy rate was 22% last year

More than 6.33 million tourists arrived "in tourist reception structures" in Romania in 2020, down 52.3% compared to 2019. The number of overnight stays exceeded 14.44 million (with stays not exceeding 24 hours), down 51.6%, according to the National Statistics Institute (INS).

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Financial News (5)

"Consumers should think twice before deferring installments"

Debtors should think twice before accessing programs for postponing the payment of loan installments, according to Alexandru Paunescu, President of the Steering Board of the Center for Alternative Banking Dispute Resolution (CSALB). Paunescu said during a video conference that those who now resort to this solution will have to pay higher rates later.

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PM Citu refuses to drop pay cuts plan for CEC and EximBank employees

"You know very well that I tried to reduce the salaries of both CEC and EximBank employees when I was the minister of finance. I was blocked by this system that we are trying to modify. I will not give up on that plan, we will push forward," said Prime Minister Florin Citu on Wednesday.

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CEC Bank to focus on agriculture, industry, logistics, construction, and hospitality this year

CEC Bank's assets reached RON 41.2 billion in 2020, after the bank's loan portfolio surged 11.7%, the highest growth rate in the last five years. CEC Bank does not plan to close any of the 1,020 branch offices it operates across the country. The bank has a lending budget of about RON 6 billion for this year, 60% of which will go to financing companies.

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Local banks' net revenues could drop almost RON 58 billion

Romanian banks could see their net revenues fall approximately RON 58 billion by 2025, because of the rising cost of risk, compared to the revenues that were expected before the pandemic, according to the latest McKinsey & Company report. Banks could face two stages of challenges in the coming months and years: rising NPLs, followed by pressure on revenues and margins.

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UniCredit Bank Romania offers financing supported by EIB

Companies operating in the sectors most affected by the Covid-19 pandemic, such as agriculture, tourism, manufacturing, trade, and transportation, can access financing on special terms from UniCredit Bank. The bank charges low interest rates to support working capital, investment projects, and other eligible expenses.

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Investment News (1)

Government to allocate EUR 50 million to hospitals

On Wednesday, the Cabinet approved a memorandum proposed by the Ministry of European Investment and Projects (MIPE), together with the Ministry of Health, urging the allocation of EUR 50 million worth of European funds to increase patient safety in hospitals. The money would come from the Large Infrastructure Operational Program (POIM).

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Legislative News (2)

Cabinet repeals privatization ban

The Cîțu Cabinet has adopted a bill repealing the ban on selling, for 2 years, the state's stakes in state-owned companies and corporations, in banks, as well as in any other company where the state is a shareholder. However, the decision is nothing more than a proposal because the final decision rests with the Parliament.

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Minimum salary could exceed 50% of average salary by 2024

The minimum gross salary could reach 60% of the average gross salary by the end of 2024, through a gradual increase that would begin in early 2022, provided that Parliament passes a bill submitted to the Senate.

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Politics (2)

President meets Spain's Foreign Affairs Minister

President Klaus Iohannis received yesterday Arancha Gonzalez Laya, Spain's Foreign Affairs Minister, who is in Bucharest for an official visit. The two officials discussed the consolidation and diversification of the bilateral cooperation between the two countries.

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PSD leader vows to oppose privatization ban repeal

Marcel Ciolacu, leader of the Social Democratic Party (PSD), stated that repealing the law preventing "the selling of Romanian companies at the height of a crisis is the biggest economic crime". "We will oppose this in Parliament," said Ciolacu.

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