Foreign direct investment (FDI) in Romania increased in the first 11 months of 2019 by about 2.55% compared to the same period last year, to EUR 5.15 billion, according to data published by Romania’s National Bank (BNR).
In the banking sector, foreign players (which dominate the market) poured EUR 787 mln (+2.5% year-on-year) almost entirely in equity, consisting mainly of reinvested earnings.
Given the sluggish lending and more than robust capital adequacy, most of the investments must have been reinvested earnings.
In the corporate sector, the foreign direct investments increased by 2.5% year-on-year to EUR 4.36 bln in January-November. Notably, the volume of new equity including reinvested earnings shrank by 8.5% year-on-year to EUR 3.71 bln, while the intra-group lending (more volatile FDI) tripled to EUR 648 mln in January-November.
A more detailed investigation on the equity investments (reinvested earnings included) in the corporate sector show certain slowdown along, however, a moderate growing trend: the 12-month rolling figure dropped to EUR 4.35 bln as of the end of November from EUR 5.21 bln two months earlier - but the volatility of this time series is quite significant and the backward adjustments rather wide. From EUR 3.6 bln, the volume of equity investments in Romanian non-financial corporations hit EUR 4.7 bln in 2018 and the 12-month rolling average was 3.3% up year-on-year as of November 2019.
The volume net investments in Romania’s economy in the third quarter of the year amounted to RON 26.84 billion (EUR 5.65...