Romania’s direct investment abroad hits 2-year high in June, but remains the lowest in Europe

Sorin Melenciuc 29/08/2018 | 07:00

Romanian investors made total direct investment of EUR 781.9 million in other countries until the end of June, up 6.2 percent compared to December 2017 and the highest level since June 2016, National Bank of Romania (BNR) data show, but Romania remains the smaller international investor in Europe.

In December 2017, foreign direct investments (FDI) abroad of Romanian residents amounted EUR 736 million. Data do not include investment of central bank.

Romania is a very small investor abroad even compared with its neighbors, as local investors prefer to focus on the local market or don’t have enough capital to expand abroad.

According to “World Investment Report 2017” released by United Nations Conference on Trade and Development (UNCTAD), Romania’s FDI outward stock amounted USD 910 million in December 2016, the lowest value among the 28 EU member states, far below Hungary (USD 25 billion), Poland (USD 24.8 billion), Czech Republic (USD 18.6 billion), Estonia (USD 6.4 billion), Slovenia (USD 5.7 billion), Croatia (USD 5 billion) or Bulgaria (USD 2.1 billion).

The outward FDI stock is the value of the resident investors’ equity in and net loans to enterprises in foreign economies, according to the Organization of Economic Cooperation and Development (OECD), which sets the international standard of FDI.

Foreign direct investment is an investment in a business by an investor from another country for which the foreign investor has control – owning 10 percent or more of the business – over the company purchased.

Official data show foreign investors made total direct investment of EUR 77 billion Romania until the end of June 2018, an all-time high, up 4.8 percent (EUR 3.5 billion) from December 2017.

At the end of 2016, the main countries of origin of FDI in Romania were the Netherlands (24.3 percent), Germany (13.2 percent), Austria (11.9 percent), France (6.9 percent), Cyprus (6.5 percent), Italy (6.3 percent), Luxembourg (4.3 percent), Switzerland (3.6 percent), Greece (2.8 percent) and Belgium (2.7 percent), according to the central bank.

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