The Romanian Economy appeals to Foreign Investors
The dropping level of debt, the increase in foreign investment and the low rate of inflation have renewed the appeal of the Romanian economy to foreign investors.
Roxana Vasile, 14.08.2015, 00:27
Romanias external debt has dropped by nearly 4 billion euros in the first half of the year. According to centralized data released by the National Bank of Romania, our countrys debt level in early July reached 90 billion euros, of which public debt accounted for 30 billion euros. According to National Bank officials, Romanians working abroad have sent significantly higher amounts of cash back home during the first half of the year. Additionally, foreign direct investment is showing signs of improvement. In the first quarter of 2015, FDI went up by 450 million euros as compared to the same period of last year. Economic analyst Daniel Apostol told us more:
“Since 2008 onwards, foreign capital injected in Romania was on a downward spiral. In March 2015 however, we reported a first spike of over 400 million euros. Later in June, we had another spike close to the 400 million mark. Overall, over the course of the last six months, we have investment worth 1.66 billion euros, a record high in recent years. At the same time, this figure is not exceedingly spectacular, because we had years when the level of foreign investment would exceed 3 or even 4 billion euros. It is a positive sign however that we have an increase in FDI by capital injections, reinvested profit and to a lesser extent what we know to be ‘intra-group loans.
Meanwhile, the good economic growth rate, low inflation rate, stable exchange rate against the euro as well as the low level of public debt might turn Romanian economy into a target destination for investors seeking economies that are less risky than those of China or Greece in order to do business. CNBC analysts say business people should look to Central and East-European states for a sanctuary from Chinese market interventions and volatility and Greek debt wrangling. This region has also gained from its close ties to Germany, Europes largest economy, Bob Parker, a senior adviser in investment with Credit Suisse believes. Parker also says that countries like Romania and Bulgaria continue to export heavily to Germany.
CNBC specialists have also referred to Romanian economic growth, which marks a record for this region. Charles Robertson, chief economist at the investment bank Renaissance Capital, also told CNBC that the Bucharest Stock Exchange went up by 9% this year, making it the best-performing frontier market so far.
