Daily Newsletter - 4 January 2023


Macroeconomic (3)
Financial (3)
Investment (3)
Legislative (3)
European News (1)
Social (2)
Romania’s economy is the 19th most complex and sophisticated in the world
Romania’s economy is the 19th most complex and sophisticated in the world, at a small distance behind Italy (16th place), China (17th place) and France (18th place), according to The Atlas of Economic Complexity, an analysis conducted by the prestigious Harvard University. The latest data included is for 2020, the first year of the pandemic. The analyzed indicator, the complexity of an economy, takes into consideration not only a country’s level of development, but also what and how it produces and especially how sophisticated the products and services it exports are. Romania has climbed in the ranking in the past few years, having gone up from the 24th place in 2017, to the 23rd, the 21st and then the 19th in each of the following years. However, local economy started its ascent from much lower, from the 39th place in the early 2000s. The accession to the EU in 2007 and the resulting opening of borders had a major impact on Romania’s development.
Romania poses four high and seven moderate risks to financial stability
Romania poses four high and seven moderate risks to financial stability, according to the latest survey conducted by the National Bank of Romania among the main banks on the local market asset-wise. The first high risk, which has been the top risk in the past two years, refers to the deterioration of domestic macroeconomic balances. The following high risks, in the order of their importance, are: the risk of an increase in borrowing costs due to the rising interest rates and/or exchange rate depreciation with negative effects on borrowers’ payment capacity, in particular households and SMEs, the risk of default on loans contracted by the non-governmental sector and the risk of an uncertain and unpredictable legislative framework in the financial-banking sector, with effects on the banking sector’s solvency.
Euro area production problems are coming to an end
The downturn in euro zone manufacturing activity has likely passed its trough as supply chains begin to recover and inflationary pressures ease, a survey showed on Monday, leading to a rebound in optimism among factory managers. S&P Global’s final manufacturing Purchasing Managers’ Index (PMI) bounced to 47.8 in December from November’s 47.1, matching a preliminary reading but still below the 50 mark separating growth from contraction. An index measuring output, which feeds into a composite PMI due on Wednesday and seen as a good gauge of economic health, also came in at 47.8, up from November’s 46.0, marking its seventh month of sub-50 readings but its highest since June.
NBR’s foreign exchange reserves stood at EUR 46.63 billion on 31 December 2022
The National Bank of Romania’s foreign exchange reserves stood at EUR 46.63 billion on 31 December 2022, up by 15% year-on-year and 2% above the level recorded on 30 November 2022, according to NBR data. EUR 2.63 billion inflows were recorded in December, representing changes in credit institutions’ foreign currency-denominated required reserves with the NBR, inflows into the Finance Ministry’s accounts, inflows into the European Commission’s account and other. There were also EUR 1.58 billion outflows, representing changes in credit institutions’ foreign currency-denominated required reserves with the NBR, interest payments and principal repayments on foreign currency public debt and other.
NBR posted an exchange rate of RON 4.927/EUR 1 on the first banking day of 2023
The EUR/RON exchange rate started the year on a slight fall, the European currency having stood at RON 4.927, 0.41% below the level recorded in the last session of 2022, according to data published by NBR. Moreover, the US currency grew by 0.91%, having reached RON 4.676. The EUR/RON exchange rate fell by 0.41% and the USD/RON exchange rate rose by 7% compared to 3 January 2022. At the beginning of last year, NBR had posted the following exchange rates: RON 4.947/EUR 1 and RON 4.355/USD 1.
Merger between EximBank and Banca Românească was registered with Trade Registry Office
Following an ambitious process, unique on the Romanian financial-banking market, the merger between EximBank, as the absorbing entity, and Banca Românească, as the absorbed entity, has been officially registered with the Trade Registry Office, according to a press release issued by the Ministry of Finance. The cited source indicates that EximBank, whose majority shareholder the Romanian state is, through the Ministry of Finance, has thus become a top Romanian universal bank dedicated to both companies and individuals.
French from Biocodex open their first branch in South-East Europe, in Bucharest
Pharmaceutical company Biocodex, headquartered in Paris, with EUR 418 million global revenues in 2021, has opened a branch in Romania, the first one in Southeast Europe. Biocodex branch will operate in an already leased space in Floreasca Lake Offices building in Bucharest. The pharmaceutical company, founded in 1953, currently specializes in probiotics (including the Enterol brand), products for women’s hygiene and health, and the treatment of rare diseases.
Cluj County Council supplied high-tech medical equipment to Turda Municipal Hospital
Cluj County Council announced on Tuesday, 3 January, that it had equipped the Municipal Hospital in Turda with two new high-tech pieces of medical equipment. The new equipment is worth RON 199,998 and the financing was entirely ensured from the County Council’s own budget. Cluj County Council President Alin Tișe said that investments in healthcare would continue, aware of the importance of highly performing equipment in ensuring the highest quality medical care.
Timis County’s administration wants to rehabilitate four emblematic buildings
Timiș County Council has announced that the Huniade Castle, the Center for Children’s Neuropsychiatric Recovery and Rehabilitation in Timișoara, Timiș County Library and "Gheorghe Atanasiu" Special High School of Technology could be renovated through the National Program for the Consolidation of High Seismic Risk Buildings. The county administration will submit projects requesting financing for the rehabilitation of these buildings. The program has been allocated RON 200 million through budgetary appropriations and RON 500 million through commitment appropriations, and financing is ensured 100%, without the need for co-financing from beneficiaries.
President Iohannis has promulgated law on traffic on public roads
On Tuesday, 3 January, President Klaus Iohannis signed the decree promulgating the draft law amending Government Emergency Ordinance (OUG) 195/2002 on traffic on public roads, which allows Salvamont (Mountain Rescue) and Salvaspeo vehicles to use special warning lights. The head of state also signed the decree on the organization and functioning of the National Integrity Agency, the decree on measures to increase the architectural-environmental quality of buildings, and the decree on the establishment of a system to promote the production of energy from renewable energy sources.
President Klaus Iohannis promulgated the Law on the electronic issuing of criminal records
On Tuesday, 3 January, President Klaus Iohannis promulgated the Law completing Article 28 of Law 290/2004 on the criminal records certificate, which simplifies the procedure for issuing this document, proposing that both the prior application and the document itself can be submitted and issued electronically. Liberal MP George Cristian Tuță (PNL) said during the vote in the Chamber of Deputies that the draft law would allow Romanians in the country and abroad to obtain the criminal record from home – as it was normal-, without the need to go to police stations.
City halls will be able to co-finance 20-80% of costs for rehabilitating historic buildings
City//town halls/mayor’s offices will be able to co-finance between 20% and 80% of the costs for rehabilitating historic buildings, and owners will have to pay the difference, according to a draft law promulgated by the head of state. Until now, the legislation stipulated that local public administration authorities could provide 50% co-financing from the local budget for intervention works on historic buildings, within the limit of the funds approved annually for this purpose.
European News 
European Commission celebrated 30 years of EU Single Market
The European Commission celebrated the 30th anniversary of the EU’s Single Market as a driver for growth that supports Europe’s economic and political power at a global level. The EU established its Single Market on 1 January 1993 by removing barriers to the movement of goods, services, labour, and capital following the signature of the Single Act in 1987 and the Maastricht Treaty in 1992. Economist André Sapir, a senior fellow at the economic policy think tank Bruegel, agreed that the Single Market was a "big success", especially for countries in Central and Eastern Europe that joined the EU after the establishment of the market.
Ministry of Health has published the list of medicines available in Romania for flu and cold
On Tuesday, 3 January, the Ministry of Health published the list of antipyretic, anti-inflammatory, flu antiviral medicines for adults and children available in Romania. The Health Ministry said there were medicines on the market and recommended the use of generic medicines, which have the same active substance. 208 laboratory-confirmed cases of influenza have been reported since the beginning of the season, according to the National Institute of Public Health (INSP).
Half of Romanians with arrears say paying their debts is difficult or very difficult
Half of Romanians with arrears, interviewed within an IRES survey, launched by KRUK Romania, said that paying their debts was difficult or very difficult - a third said they had to give up basic expenses, and 14% even healthcare expenses. Moreover, three quarters of Romanians believe significant family investments can only be made by accumulating debt. 22% of Romanians have arrears, most of them on bills (15%), repayment of loans (8%) and instalments (7%). More than half of Romanians with arrears owe at most one monthly income and 16% have to pay more than three monthly incomes.