FDI companies in Romania post record EUR 9.4 bln profits in 12 months to May

Romanian Prime Minister Nicolae Ciuca announced that in the last five months of the year foreign direct investment in Romania increased by 53% YoY. He concluded that the authorities succeeded in taking measures to encourage foreign investors, but also Romanian ones to continue to develop the Romanian economy.

It was, however, the high rate of returns (16%-17%) that convinced the FDI investors to re-invest their profits in Romania and repatriate only 44% of the profits during the 12-month period to May 2022.

The outflows generated by the incomes of the foreign direct investors in Romania reached a record level of EUR 9.45 bln in the 12-month period to May 2022, 14% more compared to the previous 12-month period, according to data published by the National Bank of Romania.

The ecosystem of FDI companies in Romania reached a point where it self-sustains, generates significant returns and is expanding while generating significant outflows as well.

The FDI companies’ incomes in the 12 months to May represent 17% of the stock of Foreign Direct Investments (FDI) as of March 2021 or 16% of the average stock of FDI over the 12-month period to March 2022 (latest data available) - in any case, an outstanding rate of return.

Out of the EUR 9.45 bln incomes generated in the 12-month period, the FDI companies invested back in Romania EUR 5.3 bln, which accounts for the vast majority of the EUR 8.6 bln foreign direct investments inflows to Romania.

The “new” FDI, meaning new money invested by non-residents in equity was only EUR 1.4 bln in the 12-month period, while the rest of EUR 1.9 bln was net lending extended by foreign groups to local FDI companies.

(Photo: Wanida Prapan/ Dreamstime)