Net FDI to Romania shrinks by 3% y/y in 12 months to June, but new equity nearly doubles

The net foreign direct investments (FDI) to Romania (inflows minus outflows) contracted by 3% y/y to EUR 7.0 billion in 12 months to June 2024, despite the 15% y/y advance to EUR 3.2 billion in Q2, according to data published by the statistics office INS.

The gross inflows of FDI were roughly the same, EUR 7.0 billion (-16% y/y) in the 12 months, because the FDI of Romanian companies abroad was only EUR 24 million.

The gross FDI to Romania in 12 months to June accounted for 2.0% of the period’s GDP, down from 2.8% one year earlier. It thus covered only less than a quarter of the country’s 7.5% of GDP CA deficit.

On the upside, the net inflows of new equity (not including reinvested earnings) have nearly doubled (+90% y/y) to EUR 2.6 billion in 12 months to June 2024, when they accounted for over one-third of total net FDI.

The volume of reinvested profits dropped by 12% y/y but accounts for the largest part of total net FDI: EUR 4.5 billion.

The net borrowing of FDI companies from their parent groups was negligible during the 12 months to June 2024, only EUR 93 million.

(Photo: Wanida Prapan/ Dreamstime)