To companies, 2021 is the moment of truth, a year at the end of which the real healthcare crisis will start showing, once the governmental support is reduced or dropped. To banks, the non-performing loan ratios could return to steady growth in 2021, once the moratorium applied in 2020 and extended into this year expires.
MACROECONOMY AND TAXATION
* Economy should grow by 4%, recouping only part of the 2020 loss. Moreover, its rebound will depend on many unknowns, first of all the rate of vaccination against COVID-19.
* Budget deficit might shrink to 7% of GDP, from 9% in 2020, but the effort means withdrawing some incentives granted to the economy during the crisis.
* Despite public sector employees keeping their salaries untouched in 2020, the dissatisfaction caused by them being frozen in 2021 could cause serious hurdles for the government.
* The government debt will continue to raise by at least 100 billion lei towards 60% of GDP.
* The government says it will not raise taxes, though it could close some tax niches.
* Romania’s tax authority ANAF could increase inspections to alleviate the budget’s cash hunger but the introduction of the SAF-T system in July could spare the tax inspectors and economy of some stress.
BANKS
* Th year 2021 comes with instalments whose payment has to be resumed in some cases, after deferments in 2020. Some customers still unable to repay them may get them rescheduled for no more than nine months in 2021, including the suspension in 2020.
* The NPL ratio could return to growth in 2021, once the loan moratorium extended into this year expires.
* Lending might slow down in 2021 and Romania’s central bank may keep the key rate at 1.5% or operate some adjustments.
* Consolidation and restructuring of the banking system will continue. Digitalization continues, too.
* The banking system may remain in the black in 2021 but make lower profit than in 2020.
INSURANCE
* The insurance market could consolidate in 2021, as well, following new deals.
* Health and guarantee insurance may continue to grow in 2021, after the 2020 rally.
* Digitalization of insurers will continue.
* Changes of positions in the insurer ranking on various segments and new entries in rankings.
* Product changes and new products introduced on the insurance market.
STOCK MARKET
* No one would have believed at the beginning of 2020 that stock markets would have the most hectic days in the past 50 years, that volatility would scare investors en-masse and many companies will not survive. In the spring, few people believed that stock markets would rebound from the coronacrisis shock and moreover, that they would not only end the year in the black, but some would hit new records.
PHARMACEUTICALS AND HEALTHCARE
* New projects started before the pandemic will open in 2021, among which the irrigation solution plant of B Braun in Timis and the private medical center built by physician Wargha Enayati in Bucharest.
* Large players will try to resume acquisitions after a wasted year.
* Authorities expect a vaccination rate of 60% to 70% of Romania’s population or 13 million people by mid-year. How optimistic is that scenario?
GROCERY RETAIL
* Almost 500 new stores – mainly convenience stores and supermarkets, will open in 2021.
* Online commerce will gain ground and continue to increase, so as to account for 4% to 5% of the total by 2025.
* Appetite for ‘Made in Romania’ will increase.
* Technology will become even more important for the local retail.
* Consumers will continue to remain cautious with their purchases, buying mostly what they really need.
LABOR MARKET
* Remote work will continue in 2021. The percentage of Romanian employees working from home has grown to 24%.
* Companies will resort to shorter working hours using the German Kurzarbeit model.
* Net average wage will increase.
* The number of unemployed in the local economy will go down in 2021.
* The future of labor belongs to a highly skilled digital workforce, which is constantly learning.
FOOD INDUSTRY
* Deals on the food and beverage market will continue, considering businesses were put up for sale last year.
* Consumers are more demanding, so flexibility of the manufacturer will matter and bring new product categories.
* Romanian food exports will rise.
* There will be insolvencies among poorly capitalized companies.
* Brands will invest in diversification and differentiation.
CONSTRUCTION MARKET
* Construction will remain the ‘lifeboat’ of a fragile economy badly hurt by the pandemic in 2021, as well, where such sectors as hospitality and food service or travel were crushed.
* Interest in houses over apartments will rise, after a long time of ‘work from home’, when people realized how important space at home is.
* New DIY stores will open, driven by the people’s spending patterns during the pandemic.
* New construction material plants will open, with Daw Benta, Leier, Austrotherm being some of those having announced such investments for 2021.
TRAVEL AND TRANSPORTATION
* There is still no certainty about how travel will do this year, and the progress of the pandemic will greatly influence the industry.
* The support scheme for the tourism industry, which offsets 20% of the decline in 2020 revenue compared with 2019, is a welcome measure.
* The trend in 2020, rediscovering Romania as far as travel goes, will continue in 2021.
* In 2021, the number of tourism insolvencies will be significantly higher than in 2020.
AGRICULTURE
* Producers of grain, dairy, honey or meat will finalize the investments in processing they started one or two years ago or begin new ones.
* New work on the irrigation infrastructure, a EUR6.5 billion project, will begin, but completion is scheduled for 2027.
* Price of vegetable oil, bread and meat could go up because producers’ animal feed costs are higher due to the low grain production.
* The organic product segment, especially organic fruit and vegetables, will increase.
TELECOM
* New telecommunications market watchdog ANCOM chairman and the new government have to decide how to organize the 5G auction and how much money to charge operators.
* Huawei should find out this year whether it may or may not participate in the construction of telecom networks in Romania.
* Deutsche Telekom and OTE will be looking for a buyer for their mobile division too.
* Orange will prepare to really enter the fixed-mobile offer game, once having taken over the former Romtelecom.
* Consumption of Internet services and video content is still on the rise.
IT
* The COVID-19 crisis will continue to drive digitalization and digital transformation processes in the business and public sectors.
* UiPath going public in New York will create a new wave of IT millionaires in Romania, who will invest in high-tech projects.
* The ecommerce sector boom will continue, amid the COVID-19 crisis.
* The IT startup ecosystem is still developing in full gear, and the hunt for unicorns continues.
* With remote work still used a lot, cybersecurity will be an important issue for companies.
(English version by Loredana Fratila-Cristescu)