Event News.ro – ROINVEST – 4th Edition

• Traditional premium event of News.ro, the fourth edition being organized in the context of the slowdown in economic growth and the war in Ukraine, which aims to support investments as a solution for removing the effects of the crisis and for the development of the country.
• During difficult economic periods, large investments in the economy are necessary to avoid a crisis, and the state gives the signal. The government must propose and implement investments that open up business opportunities.
• In the same way, private companies should invest in development, but also in production to sell, come up with new business ideas and honor all their orders and debts.
• The economy must move forward, the main objectives being the encouragement of production and consumption.
  At the event, we aim to discuss the investment plans of the state with its own funds and with European funds, as well as of private companies to support business development and the economy in general.

MACROECONOMIC CONTEXT

• The Gross Domestic Product of Romania recorded an increase of 4.7% in 2022 compared to 2021, according to the INS, and of 2.3% in the first three months of 2023 compared to the previous quarter.
• At the end of 2024, the Ciolacu Government proposed a GDP of 360 billion euros, 120 billion euros (50% more) than the one in 2021.
• Gross Domestic Product per capita expressed in standard purchasing power parity (PPP) in Romania in 2022 was at the level of 77% of the EU average, at the same level as Hungary and Portugal, above Croatia, Greece, Slovakia and Bulgaria. The government wants us to reach 82% of the EU average in terms of GDP per inhabitant in relation to the standard purchasing power in 2024.
• In the state budget for 2023, the Government estimated economic growth of 2.8%, a deficit of 4.4% of GDP and an average annual inflation of 8%.
• The European Commission estimates an economic growth of 3.2% for Romania in 2023, the National Forecasting Commission a growth of 2.8%, the World Bank a growth of 2.6%, and the IMF of 2.4%.
• Economic growth will continue, albeit at a slower pace than in 2022, due to persistent inflation, tight financing conditions and low growth in trading partners, EC estimates.
• According to the INS, inflation is decreasing – from 15.5% in February to 11.23% in April and 10.6% in May, being expected to reach 7-8% by the end of the year.

INVESTMENT CONTEXT

• The government proposed to intensify public investments, which are estimated to reach 112.1 billion lei in 2023 and 126.4 billion lei in 2024 (investments financed from national and European funds and PNRR). In 2021, public investments were 59 billion lei. The executive led by Marcel Ciolacu claims that the budget programming will in the future be oriented mainly towards investments.
• In the government program, the word “investments” appears 206 times and there is also an emphasis on increasing productivity. This will be achieved by stimulating internal production of the “Made in Romania” type and through a massive investment program at the local, regional and central level. An important objective is the reindustrialization of Romania through state aid schemes and facilities for domestic production.
• The government program also talks about the transition to the innovation economy, through government programs of the Business Accelerator type, based on grants, for competitive industries/high technology. It is also proposed to create the Romanian Innovation Fund, a risk investment fund (venture capital) in the form of a partnership in which private partners able to assume the risk of co-financing and the quality of evaluator at the same time are attracted alongside the Romanian state.< /li>
• The government wants public-private partnerships for at least 5 major investment objectives and claims that 15 billion lei can only be accessed from private pension funds in Romania, on feasible PPP projects.
• The executive forecasts FDI inflows of 24 billion euros (120 billion lei) in 2023 and 2024.

EUROPEAN INVESTMENT CONTEXT

• Within the Cohesion Policy 2021-2027, Romania has been allocated European funds of 31.35 billion euros, and through the Recovery and Resilience Mechanism it had an initially allocated budget of 29.2 billion euros for the implementation of the National Recovery and Resilience Plan . The money allocated through PNRR was reduced by 2.1 billion euros as a result of economic growth.
• The implementation of the NRDP requires reforms and investments in key areas of the economy (infrastructure, education, health, agriculture, environment and energy), which will considerably increase the potential for sustainable growth, supporting the digitization of the economy and the green transition, but they are still big problems with the absorption capacity, delayed reforms and deadlines for signing some postponed contracts.
• 20% of the funds allocated to investments in transport, the business environment and mobility, urban regeneration and the valorization of cultural heritage in the PNRR must be spent to include the digital component in the respective projects.
• The projects will run until 2026, and the European Commission and the EU Council will approve twice a year, for each state, the settlement of the amounts spent. The last payment request will be sent in August 2026.
• Furthermore, with the advent of EU Regulation 2088/2019, ESG investments (sustainable investments) are growing exponentially, as more and more investors and issuers use ESG tools and climate data to make their substantiate the investment decisions.

DISCUSSION TOPICS:

• The government investment program.
• National Recovery and Resilience Plan – objectives for 2023 and the main projects until 2026. Involvement of the private sector in PNRR projects.
• European funds from the multiannual framework for Romania – How do we attract this money? What projects do we propose?
• In which areas are we investing in the crisis – the state and private companies.
• ESG investments – the new European trend and what kind of investments and financings are being made in Romania.
• Investments in transport infrastructure, the basis of the country’s development.
• Investments in communications infrastructure – digitization of Romanian public services. Private investments in digitization projects.
• Investment strategies of companies – review of strategies in crisis, what investments are needed, what development investments will be made and what proposals the companies have for the authorities.
• Investment funds – solution for companies and supporting the economy.
• Involvement of banks’ investment divisions in supporting companies and public and private projects.
• Foreign investments. What should be done to attract new foreign investments and develop current ones in the current geopolitical context?
• Economic and fiscal facilities for investments.
• Is there a need for a long-term government investment strategy?