Foreign direct investments to Romania up 3.3% y/y to EUR 6.3 bln in 12 months to October

The net foreign direct investments to Romania increased by 3.3% y/y to EUR 6.3 billion in the 12 months to October, the central bank (BNR) announced.

The larger financing extended by foreign groups to their Romanian subsidiaries thoroughly explains the improvement: local subsidiaries’ net borrowing from parent groups increased by EUR 863 million in the 12 months to October, compared to the EUR 726 million contraction in the previous 12 months.

The equity FDI, not including the reinvested earnings, contracted by 27% y/y from an already small level to only EUR 1.3 billion in 12 months to October. The reinvested earnings contracted as well, by 18% y/y to EUR 4.2 billion, much less than the 2.1% y/y decline in the FDI companies’ earnings (EUR 11.5 billion) in the 12 months to October.

A broader picture of the FDI situation in Romania shows that the EUR 120 billion stock of FDI in Romania generated EUR 11.5 billion (nearly 10%) earnings, of which EUR 4.1 billion was reinvested.

In the previous 12 months, from EUR 11.7 billion in earnings, the FDI companies in Romania retained EUR 5.1 billion.

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