Newsletter April 2021

Approved methodological norms of SME Invest, SME Factor and SME Leasing Programs

On April 7, 2021, the Government of Romania approved the Methodological Norms of the SME Invest, SME Factor and SME Leasing Programs, as well as the minimis scheme for the SME Leasing Program, to ensure the necessary financial resources for small and medium enterprises and affiliated enterprises, overcoming the crisis the current economic context, maintaining jobs and ensuring business continuity.

With regard to the SME Invest Program, the main constraint of beneficiaries in accessing loans has been removed, namely the lack of guarantees and the creation of the necessary financial liquidity. The guarantee ceiling for this program, corresponding to the year 2021, is 15 billion lei, of which for the AGRO SME Invest Subprogram the ceiling is 1 billion lei.

In the case of the SME Factor Program, grants may be accessed within the cumulation resulting from the full amount of the risk and management fee and from the amount resulting from the application of a 50% interest rate, but not more than the RON equivalent of 800,000 euros per company.

For the SME Leasing Program for equipment and machinery, a ceiling of guarantees that can be issued in 2021 in the amount of 2 billion lei, respectively the equivalent of the gross grant of the aid in the form of guarantees related to this ceiling, in the amount of 50.9 million lei, was approved.

The Ministry of Finance subsidizes the interest related to financial leasing financing in a percentage of up to 50%, for a period of 8 months from the date of granting the financing, the administration commission and the risk commission in percentage of 100% (guarantee costs – financing) under a minimis aid scheme associated with this program.

The National Institute of Statistics: the employment rate for working age population (15-64 years)

According to the NIS press release published on April 20, 2021, in 2020, the employment rate for working age population (15-64 years) was 65.6%, decreasing by 0.2 percentage points as compared to the previous year. As in the previous years, the employment rate was higher for men (74.4% as against 56.5% for women). By residence area, the employment rate was higher for residents from urban area (67.1% as against 63.8% in rural area). The employment rate for youth (15-24 years) was 24.6%, while for elderly (55-64 years) was of 48.5%.

In 2020, the employment rate for population aged 20-64 years was 70.8%, 0.8 percentage points over the national target of 70% established in the context of the Strategy Europe 2020. Also, in 2020, the economically active population of Romania was 8973 thousand persons, out of which 8521 thousand were employed persons and 452 thousand were unemployed persons.

The highest employment rate for working age population was registered for graduates of higher level of education (88.8%). 68.1% of persons with medium level of education and only 43.4% of those with low level of education were employed. The number of employees, decreasing as compared to the previous year (-81 thousand persons), continues to hold the highest weight among employment (76.2%).

NBR: balance of payments and external debt

The National Bank of Romania published on April 13 the press release on the balance of payments and external debt february 2021. As shown in the press release, in January – February 2021, the balance of payments current account posted a deficit of EUR 1,627 million, compared with EUR 431 million in the same year-ago period. The breakdown shows that the deficit on trade in goods widened by EUR 485 million, the surplus on services increased by EUR 265 million, the primary income surplus narrowed by EUR 463 million and the secondary income balance recorded a deficit of EUR 358 million, compared with a surplus of EUR 155 million in the same year-ago period.

Non-residents direct investment in Romaniae totalled EUR 578 million (compared with EUR 690 million in January – February 2020), of which equity (including the estimated net reinvestment of earnings) and intercompany lending recorded net values of EUR 823 million and EUR -245 million respectively.

In January – February 2021, total external debt decreased by EUR 2,311 million, of which:

  • long-term external debt at end-February 2021 totalled EUR 90,947 million (73.6 percent of total external debt), down 2.0 percent against end-2020;
  • short-term external debt at end-February 2021 amounted to EUR 32,669 million (26.4 percent of total external debt), down 1.3 percent from end-2020.

Long-term external debt service ratio ran at 18.1 percent in January – February 2021 against 20.1 percent in 2020. At end-February 2021, goods and services import cover stood at 5.0 months, as compared to 5.6 months at end-2020. At end-February 2021, the ratio of the National Bank of Romania’s foreign exchange reserves to short-term external debt by remaining maturity came in at 83.5 percent, against 90.7 percent at end-2020.