Daily Newsletter - 5 September 2022


Macroeconomic (3)
Financial (2)
Investment (3)
Legislative (2)
European News (1)
Social (3)
Former Prime Minister Florin Cîțu expects inflation rate for consumer goods to explode
Former Prime Minister of Romania Florin Cîțu has stated that inflation rate for consumer goods can only stay below 25% if a miracle happens. He has also indicated that overall industrial producer prices increased by 52.3% in July 2022 compared to the same month of 2021. Annual inflation rate grew to 15% in July, after having accelerated to 15.05% in June and after having stood at 14.5% in May, according to data published by the National Institute of Statistics.
Industrial producer prices in Romania grew by 52.3% in July 2022 year-on-year
Overall industrial producer prices (local and external market) grew by 52.3% in July 2022 year-on-year, according to data published by the National Institute of Statistics (INS) on Friday, 2 September. Moreover, industrial producer prices increased by 5.2% compared to June 2022. Prices in the mining industry rose by 96.7% in July this year compared to July 2021 and fell by 0.74% month-on-month. In this category, crude oil and natural gas extraction recorded the biggest price increases in July 2022, up by 159.92% against July 2021 and down by 1.53% from June 2022.
Prices of food products at global level continued to decrease in August 2022
Prices of food products at global level continued to decrease in August 2022, by 1.9%, following a 9% decline in the previous month, according to the latest report from the Food and Agriculture Organization of the United Nations (FAO). The aggregate price index fell to 138 points, the lowest level of the past seven months, from 140.7 points in the previous month. The annual increase in food prices at global level became more moderate, to 7.9%, the lowest level in 20 months, from 13%, amid significant monthly decreases across all product categories.
Ministry of Finance borrowed RON 1.2 billion from banks on Thursday, 1 September
The Ministry of Finance borrowed RON 1.2 billion from banks on Thursday, 1 September, through two auctions of government securities, maturing in 2032 and 2025, at interest rates of 7.81% and 7.76% per year respectively. In the first auction, the ministry raised RON 871 million following the sale of government bonds with a nominal value of RON 400 million, with 2032 as maturity date and 7.81% annual interest rate. Eight primary dealers participated in the auction.
EBRD lends EUR 25 million to Banca Transilvania
The European Bank for Reconstruction and Development (EBRD) has granted a EUR 25 million loan to Banca Transilvania. The money will be used to provide financial support to companies affected by the war in Ukraine. The financing is part of a EUR 2 billion EBRD program, aimed at supporting countries and companies directly and indirectly affected by the war in Ukraine. EBRD has indicated that Romania’s economy has been hit indirectly by the effects of the war, including by an over 15% inflation rate and by a level of industrial producer prices that has grown by 48% year-on-year, while supply chain and logistics problems have affected several economic sectors.
Mayor’s Office of Sector 4 announces reopening of Unirii Passage, following EUR 12 m investments
The Mayor’s Office of Sector 4 in Bucharest has announced the reopening of the Unirii Passage, following EUR 12 million investments for the sale use of the 900-meter long passage. The builders have sealed all the leaks at road level, closed the cracks in the inner walls of the passage by injecting special mortars, which they then covered with more than 3,000 metal panels. Moreover, the Unirii Passage currently has the best ventilation system available.
DSV Road relocated its offices to new premises following EUR 1 million investment
DSV Romania, a subsidiary of the Danish group DSV, has announced the establishment of a new legal entity - DSV Road, a local and international transport company, and its relocation to a new headquarters, following a EUR 1 million investment, according to a press release. The cited source also indicates that DSV Road, the group’s local transport division, has been transformed into a separate legal entity following its accelerated growth and business potential on the local transport market. DSV Road aims to reach a EUR 100 million turnover by 2024, up by 50% against 2022. The company has committed to continue implementing environmental, social and sustainable governance standards in all the aspects of its business.
Etex Building Performance invests EUR 1 million in a new installation at Aghireșu plant
Gypsum board, plaster and plaster finishing coats manufacturer Etex Building Performance (Siniat Romania), part of the Etex Group, continues investments and the modernization process at its plant in Aghireșu, Cluj County, by acquiring a new gypsum drying and micronizing installation, according to a press release. The cited source indicates that the EUR 1 million investment confirms Etex Building Performance’s long-term commitment to the Romanian market and to its customers to whom it wants to offer high quality and sustainable products.
Government published draft OUG on energy bills’ compensation during the winter period
The Romanian government published, ahead of the meeting on Thursday, 1 September, the draft emergency ordinance (OUG) on energy bills’ compensation during the winter period. According to the draft ordinance, the final capped price invoiced by electrical power suppliers is of maximum RON 0.68/kWh, VAT included, for household customers whose average monthly consumption in 2021 was between 0 and 100 kWh inclusively, and maximum RON 0.80/kWh, VAT included, for household customers whose average monthly consumption in 2021 was between 100.01 and 300 kWh. In the case of household consumers whose monthly consumption exceeded 300 kWh in 2021, the final invoiced price shall be set by each supplier.
ACUE Federation calls for a review of new amendments to OUG 27/2022
The Federation of Associations of Energy Utility Companies (ACUE) has indicated that the amendments to Government Emergency Ordinance 27/2022 (regarding measures applicable to end-customers in electricity and natural gas market), in the published form, will lead to the significant deterioration of the financial situation of economic operators activating in the energy supply and distribution area, as it imposes significant financial and economic losses on them, which are not recognized through the reimbursement method or in the distribution tariff. The Federation has called for a review of the new amendments to OUG 27/2022 to avoid a total blockage of the market and discontinuities in energy supply to customers and has pointed out that the setting of the average settlement price for electricity suppliers is an unconstitutional provision, contrary to European and national legislation.
European News 
Russian oil price cap wins G7 support
G7 finance ministers on Friday (2 September) agreed to impose a price cap on Russian oil to slash Moscow’s revenues while keeping crude flowing and avoiding price spikes, but specifics were not defined. Energy prices jumped following Russia’s decision to launch a full-scale invasion of Ukraine on 24 February, followed by unprecedented economic sanctions against Moscow, leading to fears that revenues would be used to fuel the war in Ukraine.
Hourly labor cost grew by 11.67% in Q2/2022 year-on-year
The adjusted hourly labor cost (by number of working days) grew by 8.05% in Q2/2022 compared to the first quarter of 2022. The hourly labor cost (adjusted by number of working days) increased in all economic activities compared to Q1/2022. The most significant increases in the hourly labor cost were recorded in electrical and thermal power, gas, hot water and air conditioning production and supply (23.79%), the mining industry (19.76%), education (19.67%) and financial intermediation and insurance (16.92%).
65% of teachers call for investments in laboratories
A survey conducted by World Vision Romania shows that 65% of teachers believe more investments are needed for computer science and other subject laboratories, while 34% want more money for sanitary facilities. Moreover, 87% of teachers want a warm meals program with remedial classes to be implemented in all vulnerable schools, arguing that such a package of services helps prevent and combat school dropout.
Number of employees in Romania’s public institutions and authorities decreased by 1,741 in July
The number of employees in Romania’s public institutions and authorities stood at 1,267,971 in July 2022, 1,741 fewer than in the previous month. Nearly 64% of these employees worked in the central public administration, according to data published on the Finance Ministry (MF)’s website. Of the total 809,643 employees in central public administration (down by 2,752 against June), 596,941 worked in institutions financed entirely from the state budget. The highest number of employees was recorded by the Ministry of Education - 292,069, the Home Affairs Ministry - 123,761, the Ministry of National Defense - 73,283, the Ministry of Finance - 24,412 and the Ministry of Health - 18,240.