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CIS: Direct investments in Romania down by 21.3pct January through July
Foreign direct investments in Romania decreased by 21.3%, in the first seven months of the year, compared to the record year 2022, when their value was 10 billion euros, the head of the Council of Foreign Investors (CIS), Daniel Anghel, informs on Wednesday.
"I think it is obvious to all those present at this conference and not only that, that foreign direct investments are extremely important both for economic development and for a fairer, stronger competitive competition, whose main impact is economic development. We see that we are still facing extremely high inflation rates, but also with large deficits and increasing public debt. Romania has proven to be resilient in the face of economic challenge. Already, the figure of 7.5% seems to be optimistic in the current context. We see a slowdown after a record year in 2022, in which we attracted approximately 10 billion euros, in foreign direct investments. The synthesis of foreign direct investments and their existing stock shows a decrease of 21.3%, in the first seven months, at 3.12 billion euros. This decrease is related to the year 2022, in which foreign direct investments totaled 10 billion euros. The stock at the moment is somewhere at 118 billion, but it is extremely diversified, with a very large contribution in the manufacturing industry and with three countries on the podium - The Netherlands, Germany and Austria," said Anghel, at the "Competition in Key Sectors - 2024" conference.
The data presented by the CIS president show that only a third of the companies active in Romania have planned investment increases in the next year, with this being the lowest level in the last four years.
"Only 36% of investors have planned investment increases for the next 12 months. It is the lowest level recorded since 2020 to date. Also, 43% of the companies will maintain investments as in the previous year, and 22% will reduce them (...) We also see a positive side. The majority of respondents (65%) expect that the revenues from businesses in Romania will increase year compared to the previous year, and 66% of the respondents expect an increase on the domestic market, while on the export market 50% expect growth and 44% stagnation. If we refer to what makes investors reluctant, as I said, the macroeconomic framework and fiscal-budgetary policies, I would insist on this Fiscal Pact, something that comes with a lot of fiscal changes. Romania, which entered the excessive deficit procedure in 2019, benefits from a more preferential regime, I would say, because other countries also entered the excessive deficit race and then Romania benefits somewhat from leniency in relation to this fiscal plan, which will be divided over 7 years, so that at the end we have a budget deficit of only 3%. And we will start from approximately 8% this year. In 2025, approximately 23 billion RON must be added to the state budget from tax revenues," stated Daniel Anghel.
The Competition Council is organizing, on Wednesday, the conference "Competition in Key Sectors - 2024", in which topics are addressed regarding the importance of ensuring a functional and stable competitive environment, as well as the positive effects that the correct implementation of competition rules has on the environment economically and on consumers.