Total FDI to Romania shrinks, but more new investments are reported

The flow of gross foreign direct investments (FDI) to Romania, namely the non-residents’ investments in the country, contracted by 43% in the 12-month period ending September, compared to the previous 12-month period, to EUR 6.43 billion.

As a ratio to GDP, the gross FDI narrowed to 2.1% from 4.3% a year earlier – which was still historically high. Before the COVID-19 crisis, gross FDI to Romania measured around 2.4% of GDP.

The FDI to CA gap coverage ratio deteriorated consequently, although the CA gap has also narrowed significantly to 6.9% of GDP in 12 months to September.

On the upside, the gross flow of new equity to Romania increased impressively to EUR 2.25 billion in 12 months to September, from EUR 515 million in the previous 12-month period. The new equity accounted for 37% of total gross equity over the past 12 months, a ratio not seen since January 2021.

Another notable development is that the FDI companies are returning their loans to parent financial groups: EUR 858 million in 12 months to September, compared to EUR 3 billion borrowed over the previous 12-month period.

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(Photo source: Breeze393/Dreamstime.com)