News

Daily Newsletter - 5 October 2021

Summary

Macroeconomic (3)
Financial (3)
Investment (2)
Legislative (2)
European News (2)
Social (2)
Macroeconomic 
Economic sentiment in Romania continued to deteriorate in September
Economic sentiment in Romania continued to deteriorate in September, an evolution which, coupled with the evolution of the pandemic in the country, indicates a very high probability for economic growth to have slowed down in the past two months, with economy having already reached its maximum growth speed in the spring and summer months. Economic sentiment also fell slightly in August, after a rise in July and another deterioration in June. According to the European Sentiment Indicators (ESI) calculated by the European Commission, business climate in Romania deteriorated by a monthly rate 1.9 points for September, the Economic Sentiment Indicator having reached 100.3 points, after having dropped 1.3 points in August, to 102.2 points.
Romania’s ten-year financing cost grew considerably and reached a new record high
Romania’s ten-year financing cost, the barometer for the cost of money in economy, grew considerably last week and reached a new record high of the past 15 months, of 4.4%. Long-term financing costs resumed growth two weeks ago after the ten-year yield (RO10Y) had stood at 3.86% on 17 September. Romania borrows money on this maturity at 45% higher costs than at the beginning of 2021 and at the highest cost in the European Union
Industrial producer prices grew by 15.9% in August
Industrial producer prices (domestic market and external market) grew by 15.9% in August 2021 compared to the same month of 2020 and were up 1.5% against July 2021, according to data published by the National Institute of Statistics (INS). At the level of the domestic market, the industrial price index increased by 1.5% in August 2021 month-on-month, and by 17.39% year-on-year.
Financial 
The financial sector attracted the largest net flow of foreign direct investments in 2020
The net flow of foreign direct investments (FDI) in banks and insurance in 2020, of EUR 1.45 billion, was the highest one last year, followed by investments in industry, especially in the manufacturing one, and trade, according to data from the National Bank of Romania. The net flow of FDI in the financial sector grew by EUR 352 million (32%) in 2020 compared to the level recorded in 2019.
Average NPL rate in the Romanian banking system restarted growing in January 2021
The average rate of non-performing loans (NPL) in the Romanian banking system restarted growing in January 2021, having reached 3.90%, after having followed a downward trend in H2 of 2020, to 3.83% in December, according to NBR data. In 2020, banks continued to clean their balance sheets. As a result, the average NPL rate fluctuated around 4% of total loans, having even gone below this threshold. The 3.83% level reached by the average rate of non-performing loans in December 2020 was the lowest one last year, but also the record low of the past decade. The highest level of the NPL rate in 2020, of 4.83%, was reached in June.
Vista Bank clients will have access to over 500 Euronet ATMs in Romania
Vista Bank clients will have access to over 500 Euronet ATMs in Romania, under the same cost conditions as when using the bank’s ATMs, based on a partnership signed with Vista Bank and Euronet Worldwide. Moreover, the two companies have also agreed on the gradual integration of Vista Bank ATMs into the Euronet network within the following months. As a result, individuals and legal entities will be able to use their Vista Bank cards, at no additional cost, at any Euronet ATM in the country, to perform cash withdrawal, balance query, PIN code change and unlock operations.
Investment 
Scandinavian retailer JYSK keeps expanding in Romania by making new investments
Scandinavian furniture and home goods retailer JYSK keeps expanding in Romania and is to inaugurate on a new store in Sibiu on Thursday, 7 October. It will thus reach a network of 107 units on the local market. This will be JYSK’s third store in Sibiu, with a total area of 1,250 square meters. JYSK plans to inaugurate at least 15 new stores within the next 12 months, and to rearrange all units opened before 2018 within the following years.
Romstal Group’s majority shareholder Enrico Perini to grant EUR 100,000 financing to Sypher
Romstal Group’s majority shareholder Enrico Perini is to grant EUR 100,000 financing to Sypher, the local start-up that developed the GDPR virtual assistant - a software platform for companies in the GDPR compliance process - and which has recently launched a financing campaign for SeedBlink. The investment round is led by Sparking Capital with EUR 225,000, as the main investor. The company aims to raise EUR 325,000 from investors through SeedBlink, with investment vouchers starting at EUR 2,500.
Legislative 
Government has adopted the electricity and gas bills’ compensation scheme for the winter season
Energy Minister Virgil Popescu announced on Monday, 4 October, after the government meeting, that the Emergency Ordinance on electricity and gas bills’ compensation for the 2021-2022 winter season had been adopted. The compensation will be granted for all prices exceeding RON 0.68 per megawatt. The budgetary impact for bills’ compensation amounts to RON 1.3-1.4 billion, the Minister indicated. In order to benefit from the compensation, Romanians will have to meet a consumption limit of 30-200 kilowatts per month or 150-1000 for the entire period 1 November 2021 – 31 March 2022.
Senate has adopted the OUG approving the "Anghel Saligny" National Investment Program
On Monday, 4 October, the Senate adopted, without any changes and as the first notified body, the Emergency Ordinance (OUG) 95/2021 approving the "Anghel Saligny" National Investment Program worth RON 50 billion, allowing local public administration authorities to conclude multi-annual financing contracts to carry out works for water supply, sewerage, roads of local interest, natural gas distribution systems, during the interval 2021 - 2028. The legislative initiative will be voted on by the Chamber of Deputies, which is the decision-making organism.
European News 
European Commission initiated a public consultation on its plan to protect journalists
The European Commission initiated on Monday, 4 October, a public consultation on its plan to protect journalists and human rights defenders from litigation designed to curtail their work. Feedback from the consultation will inform the Commission’s upcoming initiative focused on the so-called Strategic Lawsuits against Public Participation (SLAPPs), which are often used by businesses, governments or individuals to silence figures from the media or human rights fields.
EU is working to strengthen various data-sharing mechanisms
The European Union is working to strengthen various data-sharing mechanisms. The aim is to promote the availability of data that can be used to power applications and advanced solutions in artificial intelligence, personalized medicine, green mobility, smart manufacturing and numerous other areas. The Data Governance Act is part of a wider policy to give the EU a competitive edge in the increasingly data-driven economy.
Social 
European Commission has approved additional resources for recovery in Romania
The European Commission has approved EUR 2 billion of additional resources for recovery in Romania, Italy, Spain and Luxembourg, following the modification of some operational programs. Romania will thus receive EUR 56 million to provide material support for disadvantaged groups, such as hot meals, assistance to disadvantaged children with school supplies and to disadvantaged mothers with essential kits for their newborn babies.
TESA healthcare union rejects any draft law that would make the right to work conditional
The union of administrative employees (TESA) in the healthcare sector announced on Monday, 4 October, that it firmly rejected any draft law that would make the right to work conditional on vaccination or testing at workers’ cost. According to them, rulers want to illegally impose this condition onto the entire personnel in the healthcare system, amid the current restrictions. The trade unionists indicated that "one can immediately identify the aberrant measures making the right to work conditional on the European COVID-19 digital certificate" in the normative act put up for public debate.