News

Daily Newsletter - 4 October 2021

Summary

FIC (1)
Macroeconomic (4)
Financial (2)
Investment (2)
Legislative (1)
European News (1)
Social (2)
FIC 
Foreign Investors Council has published the results of the "Business Sentiment Index" report

From an investment perspective, FIC noticed that companies' confidence in business opportunities is maintained, because for the next 12 months more than 53% of companies have investment plans. These results remain at high levels for BSI, marking a new peak. The bad news remains constant when looking at infrastructure, transparency and policy coherence, reducing bureaucracy and regulatory burden. Since 2016 these are, perceived as very weak and uncompetitive by most respondents. At the same time, FIC members consider that Romania has a very good opportunity to use the funding available for reform and resilience programs and find the most adequate solutions to address these issues by implementing PNRR. Although the political situation in the last month has not responded to the need for predictability of the business environment, the approval of PNRR is an important moment for this country project that we are ready to support in the implementation phase.

The perception of the Business Environment – FIC Business Sentiment Index, Autumn Edition

Macroeconomic 
Euro area annual inflation rate reached the record high of the past 13 years in September
Euro area annual inflation rate reached the record high of the past 13 years in September, and analysts expect the upward trend to continue, generating concern among ECB policymakers and investors, according to Reuters. A flash estimate published by Eurostat on Friday shows that annual inflation rate in the euro area grew to 3.4% in September, from 3% in August. This is the highest level since September 2008 and is much above the European Central Bank (ECB)’s 2% target. Analysts had expected annual inflation rate to reach 3.3% this month.
Ministry of Finance plans to contract RON 5 billion loans from commercial banks in October
Ministry of Finance plans to contract RON 5 billion loans from commercial banks in October 2021, of which RON 800 million through two discount treasury certificate issues and RON 4.2 billion through nine government securities issues. The amount of RON 630 million through additional sessions of non-competitive offers, corresponding to bond auctions, can add to these. The total amount, of RON 5.6 billion, is RON 1.2 billion higher than the RON 4.405 billion level scheduled for September 2021 and will be used to refinance public debt and to finance the state budget deficit.
Ministry of Finance will launch three new government securities issues within the Tezaur Program
The Ministry of Finance will launch three new government securities issues within the Tezaur Program, at interest rates of 3.50%, 4% and 4.40%, starting from Monday, 4 October. The government securities can be purchased from the State Treasury units between 4 and 27 October, and from the Romanian National Post Company’s post offices during the interval 4-26 October for the urban areas and between 4 and 25 October for the rural areas.
Number of companies and PFAs that faced insolvency grew by over 7.61%
The number of companies and authorized individuals (PFA) to have faced insolvency grew by over 7.61% in the first eight months of this year, compared to the similar period of 2020, a number of 3,848 insolvencies having been recorded, according to data published on the National Trade Register Office (ONRC)’s website. The most companies and PFAs that faced insolvency were registered in Bucharest, namely 708, down by 7.45% against January - August 2020, when 765 insolvencies had been reported. The fewest insolvencies were recorded in the counties of Harghita (15), Covasna and Tulcea (16 each) and Vaslui (18).
Financial 
NBR’s foreign exchange reserves decreased by EUR 400 million in September, compared to August
The National Bank of Romania (NBR)’s foreign exchange reserves decreased by EUR 400 million in September, compared to August 2021, to EUR 41.2 billion, following EUR 779 million worth of inflows and EUR 1,179 million worth of outflows. The EUR 779 million inflows represented changes in credit institutions’ foreign currency-denominated required reserves with the NBR, inflows into the Ministry of Finance’s accounts, inflows into the European Commission’s account and other. The EUR 1,179 million outflows represented changes in credit institutions’ foreign currency-denominated required reserves with the NBR, interest payments and principal repayments on foreign currency public debt and other.
EFSE offered a new loan, of EUR 10 million, to BT Microfinanţare
The European Fund for Southeast Europe (EFSE) offered a new loan, of EUR 10 million (local currency equivalent), to BT Microfinanţare (BT Mic), part of Banca Transilvania. The investment will allow the institution to increase access to micro- and small-sized enterprises’ RON-denominated financing, according to information provided by EFSE representatives. BT Mic and EFSE have been partners since 2018 and, apart from financing, they also launched an acceleration program called Start Online in March 2021.
Investment 
Romanian Post Company has finalized the first stage of the postal network’s modernization plan
The Romanian National Post Company has announced that it has finalized the first stage of the postal network’s modernization plan involving latest generation computer technology and has received a first batch of 1,100 computers. Another 2,400 computers are to arrive by the end of October. The procedure for the postal network’s modernization with new computer technology, computers and printers will reach a total level of investments of over RON 10 million, VAT not included. The source of financing is ensured from the credit line granted by EximBank.
WIP Industries is carrying out a EUR 36 million investment in Romania
WIP Industries, a supplier of components for the furniture industry, is carrying out a EUR 35.9 million investment on the Romanian market, of which EUR 17.9 million is state aid, according to data made available by the Ministry of Finance. The project is about to begin and will create 187 jobs. According to a recruitment ad published on the eJobs platform, the factory spreads on a 6,700 square meter built-up area and will manufacture furniture subparts for Ikea suppliers.
Legislative 
Government Decision introducing new measures to limit the pandemic has been published
The Government Decision introducing new measures to limit the Covid-19 pandemic, by amending the Government Decision on the extension of the state of alert, has been published in the Official Gazette of Romania. Once the document becomes available, county committees for emergency situations can meet in order to decide upon the restrictions for localities with infection rates of over 6 per one thousand, in accordance with the new legal provisions in force. Bucharest Prefect’s Office has announced that Bucharest Committee for Emergency Situations will meet, and the measures will enter into force at midnight. The Covid-19 infection rate in Bucharest has exceeded 8 per one thousand inhabitants.
European News 
Euro area finance ministers will discuss soaring energy prices on Monday
Euro area finance ministers will discuss soaring energy prices on Monday, 4 October, concerned they could slow economic recovery, impact on investment decisions and disproportionately hit the poorest. But ministers will discuss the issue separately and share best practice how to deal with the problem since they need to prepare 2022 budgets that will be heavily affected by energy costs.
Social 
Verifications in schools in Romania will start on Monday, 4 October
Education Minister Sorin Cîmpeanu has stated that verification actions in schools in order to ensure compliance with all the health protection rules amid the Covid-19 pandemic will start on Monday, 4 October. Moreover, Minister Cîmpeanu has once more called on parents not to send their children to school if they have the slightest symptoms specific to the novel coronavirus and has pointed out that non-invasive tests will be provided from the state budget, through the National Office of Centralized Procurements.
A new tranche of vaccines from Pfizer BioNTech will arrive in Romania on Monday, 4 October
A new tranche of vaccines from Pfizer BioNTech, consisting of 303,030 doses, is to arrive in Romania on Monday, 4 October, according the National Committee for the Coordination of Anti-COVID-19 Vaccination Activities. The vaccines will arrive by air at Otopeni airport. Transport to storage centers shall also be ensured by the manufacturing company, including by land. Vaccines are transported in optimal safety conditions, in special containers, with carbonic ice and sealed foil.