News

Daily Newsletter - 4 May 2022

Summary

Macroeconomic (4)
Financial (3)
Investment (3)
Legislative (1)
European News (1)
Social (1)
Macroeconomic 
National Prognosis Commission revised downwards its economic growth forecast for 2022
The National Prognosis Commission revised downwards its economic growth forecast for this year in its spring report, to 2.9%, from the 4.3% level projected in winter, amid the conflict between Russia and Ukraine and the imposed international sanctions. However, in nominal terms, the value of GDP in 2022 has been increased from RON 1,314 billion to RON 1,327 billion, according to data in the 2022-2025 Spring Forecast. The current account deficit has been estimated at 6.9% of GDP, compared to 6.7% of GDP in the winter forecast. Private consumption is expected to grow by 3.1% (3.8% in the winter forecast), investments by 4.8% (compared to 9.1%) and average annual inflation has been projected to reach 10.1% in 2022 (9.9% in the previous report).
Romania asks for more money to manage the economic impact of the war in Ukraine
Ten eastern EU states, including Romania, have signed an official letter to the European Commission asking for additional help to deal with the effects of Russia’s war in Ukraine, Rador reports, citing Latvian public television. The letter was signed for Romania by ministers Adrian Câciu (Finance) and Marcel Boloș (European Funds). The other signatory states are Bulgaria, Croatia, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland and Slovakia. The letter indicates that the eastern EU needs to shelter more than 5.3 million war refugees from Ukraine, half of them children, and the ten states say they have limited financial resources. The member states also point to problems in implementing cohesion policy projects due to supply chain difficulties and other challenges.
VAT refunded by the state to companies in Q1/2022 was RON 600 million lower year-on-year
The President of the Senate, former Prime Minister Florin Cîțu indicated, in a post on Facebook, that the VAT refunded by the state to companies in Q1/2022 had been RON 600 million lower than in Q1/2021, and that the budget deficit had been higher than in March 2021. According to the former Prime Minister, companies in Romanian are "overtaxed". The former leader pointed out that "despite all the efforts and costs for companies that support Romania’s budget with their taxes, budget deficit in March 2022 was higher than in March 2021. This is the first time in 12 months that this has happened".
Total industrial producer prices increased by 51.7% in March 2022
Total industrial producer prices (domestic and non-domestic market) increased by 7% in March 2022, compared to February 2022 and were up by 51.7% year-on-year, according to data published by the National Institute of Statistics (INS). Prices in the mining industry thus grew by 129.98% in March 2022 compared to March 2021 and were down 2.03% against February 2022. The biggest year-on-year price increase in this category was recorded by crude oil and natural gas extraction, of 132.10%. Prices, however, were 3.38% lower than in February 2022.
Financial 
Five members of BT’s Board of Directors were re-elected by shareholders
A total of five members of the Board of Directors of Banca Transilvania (BT), the biggest bank on the local market asset-wise, were re-elected by shareholders during their General Meeting on 28 April, while two new people joined the board of the most valuable credit institution on the stock exchange. To be more exact, the new Board of the Romanian banking system’s leader asset-wise, with a mandate until 2026, is formed of Horia Ciorcilă (chairman), Thomas Grasse, Ivo Gueorguiev, Vasile Puscaș, Mirela-Ileana Bordea and the two new members Florin Predescu Vasvari and Lucyna Stanczak-Wuczynska.
Banks granted RON 195 billion new retail and corporate loans in 2020 and 2021
Banks granted RON 195 billion new retail and corporate loans in 2020 and 2021, while the balance of non-government credit stood at RON 330 billion at the end of December, Gabriela Folcuț, executive director of the Romanian Banks Association (ARB), stated on Tuesday. She said that, in banks’ case, the digitalization activity had not started during the pandemic, but long before that; however, a certain acceleration had been felt in terms of investments during the period 2020 - 2021, of about RON 2 billion for the first 15 banks by market share.
ING Bank Romania granted a EUR 8.5 million loan to Romanian industrial group Promateris
ING Bank Romania has granted a EUR 8.5 million (RON 42 million) loan to the Romanian industrial group Promateris to develop its production capacity for packaging made of biodegradable and compostable materials, according to a press release. Promateris, a leader on the compostable packaging segment in Central and Eastern Europe, plans to purchase new latest generation equipment and build an industrial platform. It will focus on the production and distribution of low-carbon packaging.
Investment 
Smart Grid Carpathian Modernized Energy Network project has received EU’s final approval
The Smart Grid Carpathian Modernized Energy Network (CARMEN) project, developed by Delgaz Grid and Transelectrica SA in partnership with the Hungarian transmission operator MAVIR Magyar Villamosenergia-ipari Átviteli Rendszerirányító, has received the European Union’s final approval and has been included onto the list of Projects of Common Interest (PCI). The CARMEN project is worth about EUR 150 million and the financing application will be submitted in the second half of 2022. The project will be implemented over a six-year period, from 2023 until 2028.
Anchor Grup will build a new residential complex in Bucharest
Anchor Grup, one of the most important real estate developers in Romania, will build a new residential complex in Bucharest, called Select Residences, in the Dristor/Vitan area, following a EUR 40 million planned investment. About half of the investment is covered through financing from Libra Internet Bank, the partner bank in the development of the project. Located on Calea Dudești, close to InCity Residences, the complex will include 347 apartments with areas ranging from 63 to 246 square meters and terraces of up to 37 square meters.
Corteva Agriscience is expanding its sunflower seeds production unit in Afumați
Corteva Agriscience is expanding its sunflower seeds production unit in Afumați locality following a EUR 14 million investment, the total sum invested by the company thus amounting to EUR 74 million. The new storage and conditioning facility will allow shortening the supply chain, increasing response and delivery capacity, and increasing processing capacity at European level, to support growth in the region. Agriculture Minister Adrian Chesnoiu, who participated in the inauguration of the new unit, said that "investments in agriculture are of crucial importance, especially in the current social and economic context".
Legislative 
Ministry of Finance proposes a state aid scheme to compensate for the increase in fuel prices
The Ministry of Finance has proposed, through a draft Government Decision, a state aid scheme to compensate for the increase in fuel prices due to the international situation, the aid granted amounting to RON 0.50 per liter of fuel, yet no more than EUR 400,000 per enterprise, equivalent in RON, according to a press release issued by the institution. The cited source also indicates that the deadline for submitting compensation requests is 1 December 2022.
European News 
Romania calls for more investments in gas infrastructure
Romania has already identified alternative sources and routes for natural gas to reduce dependency on Russian imports, but it needs the region’s gas corridors to become operational, the energy minister said. EU energy ministers met in Brussels on Monday (2 May) to discuss the energy security in Europe after Gazprom cut supplies to Bulgaria and Poland. In this context, Romania conveyed to the European Commission that it was important for the country that the Vertical Gas Corridor and the Trans Balkan Gas Pipeline become operational and function at the maximum capacity, Romanian Energy Minister Virgil Popescu said after the Council meeting. The two pipelines are needed to ensure gas flow from liquefied natural gas terminals and Azerbaijan. Europe is buying more of their gas in the coming period, the energy minister explained in a Facebook post.
Social 
HoReCa employers have offered more than 11,000 jobs since 9 March
HoReCa employers have offered more than 11,000 jobs in Romania and abroad since 9 March, when the Covid-19 restrictions were lifted. The hospitality industry thus ranks second in the top of sectors with the most job offers published on eJobs during this period, after Retail. Moreover, the number of vacant HoReCa jobs made available during the period 9 March-present is 153% higher than the level recorded during the same period of last year and 22% higher than in 2019, according to data from eJobs Romania, the leader of the recruitment market. The advance is spectacular when compared to 2020, when the lockdown had been imposed, of +262%.