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BNR: Brexit impact on Romanian economy is one of the smallest in EU
Brexit will have low impact on Romania's economy, being among the lowest in EU and the access of company and people to financing will not be affected, said Florian Neagu, deputy director of the Financial Stability Department of the National Bank of Romania on Thursday.He participated in the online conference “Brexit impact on business in Romania”, organized by Financial Intelligence.
According to him, the number of companies with British capital in Romania is small, about 3,000 firms, some of them large or very large, but their role in Romanian economy is modest. With 1.8% of gross VAT they produce 1.6% of the business figure per economy and sire 1.3% of total employees.
“These companies have good performances, which could be an argument that they will maintain their presence in the country and even other companies will find opportunities in Romania. Capital profitability was 19.5%, a satisfactory figure compared to Great Britain and other countries. So the Brexit process could finally bring more favorable events to economy rather than losses,” the central bank representative considers.
As for the volume of direct foreign investments in Romania, it was 2.85 billion euros in December 2019, a relatively low volume, while Great Britain is the 9th country in EU in this top.
“Recent analyses show there are about 1,400 Romanian companies which export to Great Britain. Those companies has an important role in Romanian economy but exports to UK represent only 3%. Out conclusion is that consequences on those companies on financial health are manageable,”the BNR official considers.
As for the Brexit impact on the banking system, he showed that this process will not affect access to financing.
“In the Romanian banking system there is a single credit institution with British capital and the share of this bank in the credit volume is under 0.6%. Direct financing, which many companies in Romania got directly from Great Britain is not very big, and half of it comes from the mother-daughter channel, less influenced by that change,”said the BNR director.