August 6, 2022 UPDATE

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Newsroom, 06.08.2022, 19:15

INFLATION
The National Bank of Romania Friday raised the monetary policy interest rate
for the 6th time this year, in an effort to keep inflation in check.
The key interest went up 0.75%, to 5,5% per year, and takes effect on Monday. The
central bank also decided to raise the interest rates for loans and for
deposits. Keeping a firm control on cash flows in the monetary market and
maintaining the current levels of minimum compulsory reserves for banks’
domestic and foreign currency liabilities are also decisions made on Friday by
the National Bank. Experts expect a steady annual inflation rate in Q3 and a
gradual decrease later on. In June the inflation rate reached 15.1%.

DIASPORA
The Romanians in the diaspora who plan to return and invest in a business that
creates at least 2 new jobs may obtain funding of up to EUR 40,000 under the 3rd
edition of the Start-Up Nation programme, the Romanian tourism ministry
announced. Applicants whose start-ups create only one job may receive up to EUR
20,000. To benefit from the EUR 4 million programme, applicants must submit
proof of their residence abroad.

BUDGET
A state budget adjustment is scheduled for next week in Romania, according to
PM Nicolae Ciucă. Among other things, expenses with supplies and services will
be cut by 10% for each ministry. An analysis will also be conducted to ensure
the coherence of the forthcoming budget adjustment and of the funding programmes
for Romania.

ECONOMY
East-Europeans started to feel the effects of the war in Ukraine later than the
major Western economies, due to 2-digit salary increases and generous
subsidies. Now however, they have to reduce their expenses in order to make
ends meet, reads a Reuters analysis, according to which the 2-digit inflation,
the over 15% rise in foodstuff prices and the growing energy costs are affecting
the spending power of people in Eastern Europe. In Poland, people are
shortening their holidays, Czechs are saving by eating out less and looking for
a second job, while in Hungary people are buying less food and a lot fewer
durable goods. According to analysts, the risk of 2-digit inflation extending
into 2023, as well as the new revised estimates regarding the Eurozone point to
a risk of recession.

NATURAL
GAS An EU-wide 15% reduction of natural gas consumption will come into force
early next week, the Czech presidency of the EU Council announced. The
regulation was adopted officially, and the text will be published in the
Official Journal on Monday and will take effect the next day. The president of
the European Commission, Ursula von der Leyen, called on member states to
prepare for the worst-case scenario of Russia suspending gas supplies. Member
states must also secure 80% of their winter needs ahead of time.

COVID-19 Over 6,400 new COVID-19 cases were confirmed on Saturday in
Romania. More than 3,800 patients are hospitalised, nearly 260 of whom in ICUs,
and 28 Covid-related deaths were reported.Since
the start of the pandemic, nearly 66,200 people have died of COVID-19 in
România.

UNTOLD Cluj Napoca, north-western Romania, is hosting the most eagerly
awaited music festival this summer, Untold. The event takes place on several
stages, with over 200 Romanian and foreign artists, as well as the world’s best
DJs, performing until Sunday night. This year’s theme of the festival is Temple
of Luna, an artistic concept that highlights the mythological side of
Transylvania, seen as a land of the night and magic. Scores of stands sell
food, drinks, clothing and gadgets. The organisers expect over 400,000 people
to attend this year’s edition.