Net FDI to Romania down 17% y/y to 1.5% of GDP in year to April

Despite positive base effects in April 2025 after net foreign direct investments (FDI) outflows a year earlier, the cumulative net FDI in 12 months to April contracted by 17% y/y to EUR 5.40 billion (EUR 5.45 billion in gross terms), according to datapublished by the National Bank of Romania on June 13.

Notably, the net inflows of new equity investments contracted by only 4% y/y to EUR 1.4 billion. The preferred form of FDI remains, however, the reinvested profit: EUR 3.8 billion (-21% y/y) in 12 months to April. The 21% y/y decline illustrates the volatility of such investments during politically insatiable periods. The net loans extended to local FDI companies, which were quite significant during certain periods, accounted for only EUR 143 million (-24% y/y) in the 12 months to April.

Notably, the share of profits reinvested by the FDI companies improved to 32% in the 12 months to April, from 28% in the 12 months calculated in March. The ratio, which illustrates FDI investors’ commitment to the market, has dropped below 40% in May 2024. The total profits generated by FDI companies in Romania increased by 3% y/y to EUR 12.1 billion in the 12 months to April, when they returned to the record values seen in 2022 and the first part of 2023.

(Photo: Suriyapong Koktong/ Dreamstime)