Daily Newsletter - 8 June 2022


Macroeconomic (3)
Financial (3)
Investment (4)
Legislative (4)
European News (1)
Social (3)
8 out of 10 Romanians expect prices to grow by an average of 25% in the following period
A recent survey conducted by Ipsos for ING Bank shows that 8 out of 10 Romanians expect prices to grow by an average of 25% in the following period. In this context, in order to keep up with the rising prices, 80% of them target discounts and promotional offers in their daily shopping and more than 50% spend less on clothing items. Moreover, 36% have postponed the purchase of durable goods (such as a car), 18% have postponed starting their own business and 16% have postponed changing jobs, while 14% are still thinking about having a baby.
Florin Cîțu voiced concern over the possibility of a new crisis
Senate President Florin Cîțu has voiced concern over the government’s "lack of a clear strategy" for the following period to counter "what seems" to be coming, namely "a major economic crisis", considering that only measures leading to growing expenses are being taken. He has pointed out that the introduction of taxes would be the only viable option if "negative crisis scenarios" come true. Referring to the Chamber of Deputies’ decision to vote, as a decision-making body, on an amendment to increase salaries, Florin Cîțu has indicated he is concerned about this, given that the impact of these salary increases had not been taken into account, stressing that the government’s role is to present a strategy.
World Bank has improved its economic growth forecast for Romania
Romanian economy is expected to grow by 2.9% in 2022, the World Bank indicated in its Global Economic Prospects report on Tuesday. The estimates are better than those included in another report in April, when the international financial institution had forecast that Romania would record a modest 1.9% advance in 2022. Word Bank’s projections are significantly lower than those in the January edition of the Global Economic Prospects report. At the time, the organization had estimated 4.3% economic growth. For 2023, the World Bank has forecast 3.7% GDP growth for Romania, compared to January’s 3.8% projection, and has estimated 3.9% growth for 2024.
CEC Bank increased interest rates for household savings by 0.75-1.45%
CEC Bank increased interest rates for household savings by 0.75-1.45% on Tuesday, 7 June 2022. As a result, interest rate for three-month deposits made by individuals has grown to 3.25%, from 1.80% previously. If the deposit is made online, the interest rate for three-month deposits reaches 3.35%. Most large banks have been raising interest rates on deposits, a trend also supported by the National Bank of Romania, in order to boost saving. Interest rates range from 2% to 6% on the market.
Raiffeisen Bank is preparing new green bonds for Bucharest Stock Exchange
Raiffeisen Bank, one of the largest credit institutions in Romania, is preparing a RON-denominated green bonds issue that will be brought onto Bucharest Stock Exchange at the end of June. The financing would be senior non-preferential and eligible under the minimum requirement for own funds and eligible liabilities (MREL). The bonds will have four-year maturity and an interest rate 80-90 basis points above Romania’s four-year government bonds, currently at 7.98%, which means an interest rate of around 8.8% per year.
NBR bought RON 36.6 million RON-denominated government bonds from secondary market
The National Bank of Romania (NBR) purchased RON 36.6 million RON-denominated government securities from the secondary market in May, according to monthly statistics published by NBR on Monday. The purchase operations are meant to reduce the volatility of yields on RON-denominated government securities, as investors are reducing their exposure to sovereign bonds at local and global level, pushing up financing costs. Apart from the weak demand for RON-denominated bonds due to high inflation and to Romania’s complicated fiscal situation, the local secondary market is illiquid. As a result, a moderate episode of sale of RON-denominated bonds can push up sovereign yields considerably.
Someș S.A. Water Company has started an approximately RON 77.4 million investment
Someș S.A. Water Company, where Cluj County Council is the majority shareholder, has started an approximately RON 77.4 million (EUR 15.7 million) investment for the rehabilitation of water supply and sewerage networks in the city of Cluj-Napoca. The investment is part of a EUR 355.6 million European project, financed through the 2014-2020 Large Infrastructure Operational Program - POIM and carried out by Someș Water Company.
Oradea City Hall launched tender for extension of County Hospital’s outpatient department
Oradea City Hall has launched the tender for the extension of the outpatient department of the B body of Oradea County Emergency Clinical Hospital, a RON 38.8 million (EUR 7.8 million) investment, VAT not included, covered from European funds. The deadline for submitting bids in SEAP is 8 July 2022, according to a press release issued Oradea City Hall. The current hospital building will be extended on the western and northern side, occupying part of the existing platform for car access and parking, a portion of the existing green space and the access road behind the land corresponding to the building.
MedLife has opened a new hyperclinic
MedLife has inaugurated the first major medical clinic in Târgu Mureș. The new multidisciplinary unit covers 16 medical and surgical specialties for examinations, tests and minor surgery for patients from the center and north of the country. The MedLife Târgu Mureș Hyperclinic spreads on 1,000 square meters and comprises 12 medical units, a sample collection unit, an imaging department equipped with MRI and other medical equipment, a minor surgery room and a tests room. The investment for opening this unit amounted to EUR 2 million.
Rottaprint invested over €3.7 million in technologies for sustainable label production
Rottaprint has finalized the implementation of a project which more than EUR 3.7 million has been invested into over the past three years, in technologies and machinery for the sustainable manufacturing of products in its portfolio. The project "Development of innovative and environmentally friendly labels" was financed with support of grants from Iceland, Liechtenstein and Norway through the EEA and Norwegian Financial Mechanisms 2014 – 2021, under the program "Growing SMEs in Romania!". Of the total investment, the non-refundable assistance amounted to about EUR 1.5 million.
Ruling coalition’s MPs have submitted a new draft law
The ruling coalition’s MPs have submitted a draft law that will allow city/town halls and mayor’s offices to settle transport costs of all employees who live in other localities than the place of work. The draft law was tabled by PNL, PSD and UDMR MPs last week. Moreover, the ruling power’s parliamentarians are preparing an amendment to the Salary Law that would increase mayors’ salaries as well.
Draft law on intervention on bears will be re-analyzed in parliamentary committees
The Chamber of Deputies’ joint Public Administration, National Defense, Environment and Agriculture Committees decided on Tuesday to partly approve President Klaus Iohannis’s request for reanalysis of the draft law regarding interventions on bears to prevent and combat attacks on people and property. Lawmakers maintained the provision according to which the interventions will be carried both inside and outside the built-up areas of localities. The draft law approving Government Emergency Ordinance 81/2021 on the approval of immediate intervention methods to prevent and combat attacks by brown bears on persons and their property, inside the built-up areas of localities, had been initially adopted by Parliament on 15 December 2021.
USR challenges at CCR the draft law increasing dignitaries’ payments
Save Romania Union (USR) has announced that it will challenge, at the Constitutional Court of Romania, the draft law adopted by Parliament which increased the payments of all dignitaries. The note correcting a material error for a draft law adopted during last week in the plenary session of the Chamber of Deputies, which was read on Tuesday in the plenary of the same chamber, includes the President of Romania, members of Parliament, members of Government, the Ombudsman, prefects, sub-prefects, etc. among those who benefit from increased payments.
REPER calls for the immediate clarification of the content of draft national security laws
REPER has called on the ruling coalition and the President of Romania to immediately clarify the content of the draft laws regarding national security and the process of debate and adoption they propose. For REPER, the message that the political environment must assume is that the intelligence services, precisely as they are supposed to serve citizens and the state, can no longer continue to operate in an ambiguity that can generate imbalance and abuse of power.
European News 
Romania wants €3 billion more from EU recovery plan in October
The government plans to ask the European Commission for the disbursement of €3 billion from its recovery and resilience plan in October. Last week, the Romanian government sent the first payment request for recovery and resilience funds to the European Commission, including the targets and milestones set in the national recovery and resilience plan for the end of 2021.The amount requested is around €3 billion (€2 billion in grants and €1 billion as loans). It adds to the €3.7 billion already received by Romania as pre-financing from the plan. Officials are now waiting to see if the European Commission needs any clarifications for the 21 targets before making the payment.
Employers are accelerating activity on the labor market
Employers are accelerating activity on the labor market and are opening new positions or looking to fill positions vacated as a result of the growing employee mobility, despite the challenges faced since the start of 2022, according to BestJobs representatives. BestJobs recruitment platform has reached a new record high of 42,000 job offers, the highest volume of active jobs in the past two and a half years. Moreover, the number of candidates contacted with a job offer has increased by more than 30% compared to the previous month.
Romanians’ intention to travel in 2022 is higher than in 2019
A Google analysis of travel-related searches over the past three years shows that Romanians have resumed their travel intentions abroad with the lifting of anti-COVID restrictions and are turning to traditional summer holiday destinations - Greece, Turkey, Bulgaria. Campsites and private villas, accommodation options that offer more privacy and reduced risk of illness, are the fastest-growing post-pandemic options.
Average total monthly income in 2021 stood at RON 5,683 per household
The average total monthly incomes in 2021, in nominal terms, stood at RON 5,683 per household and RON 2,243 per person, up by 8.9% and 10.5%, respectively, against 2020. Total household expenditure in 2021 was, on average, RON 4,876 per household per month (RON 1,925 per person) and represented 85.8% of total income, up by 2% year-on-year, according to data from the National Institute of Statistics. Of the total income, cash income represented RON 5,313 per month per household (RON 2,097 per person), on average, up by 9.8% compared to the previous year, while income in kind stood at RON 370 per month per household (RON 146 per person), down by 1.7% against 2020.