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EIB poll: Investment activity in Romania still one of the lowest in Europe
Investment activity in Romania is one of the lowest in EU, when 68% of companies have invested in the latest financial exercise, compared to 87% at EU level, according to the annual opinion poll on EIB investments, presented by Debora Revoltella, the director of EIB Economic Business Department, at the National Bank of Romania, on Tuesday.
The annual poll on EIB investments shows that the investment deficit perceived , expressing the share of companies that did not invest enough in past years, is over the EU level (20% against 16%). That fact confirms the low investment rate at macroeconomic level and a significantly lower share activity. The average share of machines, equipment based on top technology is one of the lowest in EU, the energy efficient real estate park also having a low share.
The poll made at European level includes Romania and offers EIB a powerful political instrument to understand investment plans and needs of state and private companies, as well as to define the way in which EIB can bring value to economy and people. Together with many local representatives, EIB is ready to answer the existing needs by financing investments carried out by corporations and state entities in Romania, said Andrew McDowell, EIB vice-president.
BNR governor Mugur Isarescu declared that EIB represented a strong pillar for Romania’s strategic economic development, directing investments to critical sectors like transports, digital infrastructure and new technologies, education for specialised labour force, health or agriculture.
Following an extended post-crisis period, with public and private capital investments under 30% of those in 2008, investments recorded a positive growth rate in 2017, prognoses being better, according to EIB representatives. The tendency to grant priority to consumption as concerned public expenses and the debt degree of private corporations were the main factors which prevented investment recovery until last year. Understanding the reasons which laid at the basis of the slow and non uniform investment recovery process in the last decade is the key element for defining adequate political interventions in order to confirm and benefit from a positive tendency.
Company investments remain focused on replacement and orientation toward corporate shares. Investments in non corporate shares are below EU level - 25% against 36%. A more attentive analysis of the company innovation activity in Romania shows that most innovating companies are based rather on adopting solutions that on their development.
According to the poll, about 12% of companies are facing constrictions in financing, while the dependence on domestic financing sources is still high. Access to financing is a problem bigger in Romania than in other EU countries, while innovating companies in the field of advanced technologies, is facing higher difficulties in obtaining foreign financing. Uncertainty in the future, as well as regulations about enterprises and the labour market are the main barriers for enterprises in Romania. Moreover, the lack of adequate transport infrastructure is a bigger obstacle for Romanian companies compared with similar enterprises in EU. Finding labour force with adequate training is a problem faced mainly by innovating companies.
This general presentation at country level includes data obtained following interviews with 475 companies in Romania over April-August 2018 and is part of the annual poll of EIB Group about investments and financing investments (EIBIS), a EU poll with 12,500 companies, collecting data about investment activities at small very large company level, about financing demands and difficulties facing them.