SIMILAR ARTICLES

Ranking of discernment: Spectacular increase in August in the difference between Romania’s other EU countries’ borrowing costs

The long-term interest rate fell below zero in the Eurozone and dropped to only 0.28% on average at the EU level, half as compared to… Mai mult

Tourism balance drops to minus 36%, despite billions of public money that Government pumped into the market

Net costs for the state with holiday vouchers for public sector employees and the VAT cut for tourism will amount to RON 1,878 million in… Mai mult

Continuing quantitative easing: how justified is it? (III)

In this last article from the series devoted to the analysis of the quantitative easing performed by the European Central Bank (ECB), we will deal… Mai mult

Continuing quantitative easing: how justified is it? (II)

In this second article of the series dedicated to the analysis of the quantitative easing performed by the European Central Bank (ECB), we will focus… Mai mult

Continuing quantitative easing: how justified is it? (I)

The European Central Bank (ECB) has restarted, in the summer of 2019, its rhetoric concerning the necessity of a new round of quantitative easing, i.e.… Mai mult

Cronicile

Foreign investments picture: On economic sectors, regions, countries of capital origin

de Dordia Tereza 5.10.2016

structura_investitii-pozaFDI net inflow in 2015 was 3,461 million euro (slightly more than 2% of last year’s GDP), according to a research made by the central bank in collaboration with the National Institute of Statistics (INS). Final FDI stock, as of 31 December 2015, came in at EUR 64,433 million (40% of GDP), out of which about 70% equity of FDI enterprises and 30% total net credit from foreign direct investors.

The amount representing the FDI in 2015 resulted as difference between EUR 3,595 million, equity of FDI enterprises (foreign capital represents at least ten percent) – contribution which includes the reinvested earnings amounted to EUR 510 million – and the net credit of direct investment enterprises from foreign direct investors of EUR -134 million (negative value representing the difference between loan repayments and new credit inflows).

Strictly speaking, foreign funding inflow was EUR 3,085 million, of which investments in new enterprises (greenfield) accounted for only 96 million, representing less than three percent of the total, which indicates the relatively low interest of foreign investors to develop new businesses in Romania.

Notably, the amounts from mergers and acquisitions had a negative contribution of 5 million to the end result. The most significant amount represented the development of existing enterprises (EUR 1,742 million, about a half of the net inflow), while the rest of EUR 1,252 million represented the company restructuring.

Structure by country of origin: from countries to offshores

Three countries (the Netherlands, Austria and Germany) concentrate more than a half of the foreign investments, if we go by the officially declared residence of the foreign capital.

However, the real origin is significantly different, which is obvious in ranking countries like Cyprus and Luxembourg the fourth, respectively the seventh, while the US only ranks the tenth and Britain just the 13th.

tabel1-1

*

  • Amounts and percentages for the main origin countries of the foreign investments (31 December 2015)
  • Country – million euro – % of total

*

 

Also important to note the rather weak positioning of the second and third Romania’s foreign trade partners, namely France and Italy, which ranks here the 5th, respectively the 6th; as well as the presence above the 1 percent threshold of our Eastern bloc colleagues Hungary and the Czech Republic, which also needed foreign investments but that did not prevent them from capitalizing on opportunities abroad.

Foreign investments, on main development regions

In the allocation of foreign investments by region, the Bucharest region concentrated about 60% of the amounts accounted for as FDI.

This region was followed at a great distance exactly by the most developed regions of Romania, while Oltenia and Moldova ended up at the bottom of the list of attractively for the foreign capital. This result deepened the development imbalances and the gaps between regions to a ratio of almost 4 to 1 (Bucharest-Ilfov with 131% of the EU average, as compared to the North-East with 34%).

tabel2-1

*

  • FDI distribution by development regions
  • Region – million euro – % of total

*

FDI by main economic activities

Contrary to daily stereotypes publicly circulated and the visual impression, FDI was primarily channelled to the industry, with 44.6% of the total amount invested by foreigners in Romania, out of which the largest recipient was the manufacturing industry (over 20 billion or 31.8% of total). The second largest recipients were the banks and insurance companies and only the third, almost on par, the trade, next to construction.

It is noted in the manufacturing industry category a difference between similar FDI amounts for the petrochemical sector, which fuels almost entirely Romania’s trade deficit, and the transport industry, which on the contrary stimulated the growth of medium and high-tech products’ share and contributed an essential sectoral surplus to balancing the trade balance.

tabel3

*

  • FDI distribution by main economic activities
  • Activity – million euro – % of total
  • Manufacturing industry
  • of which
  • oil processing, chemicals, rubber products, etc.
  • transport means
  • metallurgy
  • food, beverages and tobacco
  • wood products, including furniture
  • cement, glassware, ceramics
  • Financial intermediation and insurance
  • Construction and real estate transactions
  • Trade
  • Industry – energy, natural gas, water
  • Professional, scientific, technical activities, etc.
  • Information technology and communications
  • Extractive industry
  • Agriculture, forestry and fishing
  • Transportation
  • Hotels and restaurants
  • Other

*

Although it has almost gone unnoticed, the extremely low share of FDI in the hotels and restaurants segment affected the development of an economic sector far below the natural potential and the accommodation capacity available in Romania. The same applies to agriculture, which has a huge potential for productivity increase, key factor for improving competitiveness at national level.

Altogether, FDI level was rather low compared to the size of the economy, with an average of less than two percent of GDP per year. As compared to the payment of obligations on the public debt that almost reached to the threshold of 40% of GDP (another interesting coincidence, in the light of the results of a quarter century of capitalist economy).

Mergeți în homepage ›

Publicat la data de 5.10.2016

Lăsați un comentariu


NEWS

Romania and Juncker Plan: EUR 720 million attracted, of which 35% by Transgaz for BRUA

(The map of investment financed through Juncker Plan, by GDP share. Darker colours mean higher shares) The operator of national natural gas pipelines, Transgaz (TGN)… Mai mult

Top 3 reasons why young people leave Romania

Lack of trust in authorities, corruption and low living standards are the main reasons why young people leave Romania. The data is part of a… Mai mult

IMM Invest Romania – program implementing rules have been published

The Ministry of Public Finance announces that it has issued the methodological norms for the implementation of the Program for supporting small and medium-sized enterprises… Mai mult

Pollution import and car park expansion: comparisons with the other EU states

Romania is the EU country with the fewest cars in terms of the number of inhabitants, according to data recently published by Eurostat. We appear… Mai mult

Government is trying to save budget deficit: reductions in public administration system, cancellation of bonus for harmful conditions, excise duty on soft drinks

The Government is preparing the public for the first measures aimed at avoiding the budget slippage, which would be applied by the PSD-ALDE government. News… Mai mult

Laura Codruta Kovesi remains alone in the race for European Chief Prosecutor

French Prosecutor Jean-Francois Bohnert will be appointed as head of the European Financial Prosecutor's Office, a position for which he was heard on Thursday, 11… Mai mult

Romania - EU country with highest risk of dying in a road accident, Bulgaria is quickly decreasing number of victims since it built motorways

Romania recorded the highest road deaths in the EU also last year, with 96 deaths per one million inhabitants in 2018, almost double the EU… Mai mult

Latest developments in progress at Health Ministry: Differentiated wages based on performance, competitions organised at a regional level not by hospitals

Sorina Pintea announced on Thursday further new changes that will be brought to the functioning of the health care system, including new rules for employment… Mai mult

ANAF changes selection procedure for liquidators. Main changes

The new order on approval and selection procedures for insolvency practitioners is an important step to a very good direction, industry experts say. ANAF is… Mai mult

Romania loses competition for a seat at UN Security Council. MAE Excuse: Campaign started too late

Romania lost to Estonia in the final vote to get the non-permanent member position within the UN Security Council for the period 2020-2021. On Friday,… Mai mult

Business internationalization / eMAG makes a step to entry five new international markets and targets a business of EUR 2 billion

eMAG hopes to get the opinion of the Hungarian Competition Council over the next two months for the acquisition of Extreme Digital, the market leader… Mai mult

"At a distance from books": 85,000 teachers (one third of educational staff) are graduates of distance learning

Approximately 85,000 teachers are graduates of distance learning (ID) programs, Education Minister Ecaterina Andronescu said at a meeting with school inspectors from Caras-Severin County. The… Mai mult