PwC: Infrastructure expenses to go up 5 percent every year until 2025

Infrastructure expenses will increase 5 percent every year until 2025, much faster than expenses in Western Europe, but slower compared to the global average. The total allotted sum will reach USD 30 billion by 2025, according to a report from PwC and Oxford Economics.

“Romania’s infrastructure, transport infrastructure especially, is in great need of improvements, which justifies the substantial increase in road expenses in the lat few years. We expect transport infrastructure to continue to be a priority during Europe’s economic recovery. Investments in roads, sustained in part through European funds, will continue to constitute the main expense for transport infrastructures, with a scheduled increase from USD 4.5 billion in 2013 to USD 9 billion in 2025”, according to Daniel Anghel, service team leader for PwC Romania.

Heavy industry in Romania is competitively advantaged compared to the industry of neighboring states with higher production costs. Investments in these sectors grew in the years previous to Romania joining the European Union, but decreased after the world collapsed into economic crisis. In the long term PwC is expecting investments to recover in these sectors (especially metal, chemistry and refineries) and will double from USD 2.3 billion in 2013 to USD 4.5 billion in 2025.

Social expenses are also a priority, with medical care expenses increasing 0.5 percent faster every year than education expsnses, given that Romania’s population is aging rapidly (faster than nations in Western Europe). Total expenses in social infrastructure will reach USD 10 billion by 2025.

“In order to consolidate and accelerate its economic growth, Romania will meed massive investments in infrastructure in the next 10 years, worth tens of billions of dollars. (..) We should take inspiration from the spanish model of infrastructure development, which utilized concessions to the max”, Anghel added.