Romania: Significant Decline in FDI
Foreign direct investments in Romania declined 41 percent due to ongoing economic difficulties in Eurozone member countries.
Romania: Significant Decline in FDI / Picture: © Vindobona.org
The foreign direct investments in Romania decreased by 41 % to € 211m in the first quarter of the year, as the ongoing economic troubles of Eurozone members, which have built strong investment positions locally, do not seem to have an end in sight. According to the National Bank of Romania (NBR), intragroup loans contributed € 213m to the non-residents’ direct investments in Romania, while the equity stakes consolidated with the estimated net loss posted net payments of EUR 2 million.
Representatives of BCR, the biggest lender in Romania, recently announced that growing inflows of FDI and EU funds play a central role in securing growth. Romania’s medium and long term external debt grew by 2.6 % to € 80.7bn, which was 79.9 % of the total debt in the first quarter against the previous one. Meanwhile, the short term debt gained 0.3 % to € 20.3 billion. The medium and long term debt ratio ran at 33.1 % in Q1 and the goods and services import cover rose to eight months.
Romania has registered a surplus of € 69m in the balance-of-payments current accounts, due to a surplus of € 153m in services from a deficit of € 79m and the reductions in trade balance and income deficits of € 640m and € 347m respectively.