Investment in the Romanian economy sees fourth consecutive quarterly decline

Net investment in the Romanian economy decreased by 7.4 percent in the first quarter of 2014, compared to the same period last year, according to data released by the National Statistics Institute (INS) on Wednesday, June 4. This is the fourth consecutive quarter in which investment declined compared to the similar period in the previous year. Investment continues to be a drag on Romania’s GDP growth, which relied mostly on domestic consumption in the first quarter. One of the main causes for the drop in investment in the first quarter is that the Government cut its investment expenditure to meet the budget deficit target. In the first four months of the year, state investment was about 40 percent lower than in the same period of 2013, according to data from the Finance Ministry. Investment for new construction works were down 10.9 percent, while investment in equipment, which also include means of transportation, decreased by 6.8 percent. Other investment expenses were up 10.7 percent, INS data shows. Total investment was close to EUR 2.5 billion. Industry accounted for 43.5 percent of total investment, followed by the trade and services sector, with 35.6 percent, and the construction sector with 13.8 percent. Investment in agriculture was just 5.4 percent of the total. Andrei Chirileasa, andrei@romania-insider.com