Romania, which was once one of the poorest countries in Europe, is also experiencing great momentum thanks to the aid of the European Community, to become the second largest national economy in Eastern Europe, after Poland.
Although political instability and corruption have slowed growth, the country can expect impressive growth since it joined the EU in 2007.
The International Monetary Fund (IMF) has forecast economic growth of around 3% this year, compared to the growth of the Polish economy which, on the other hand, will grow by only 0.5% this year.
The war in Ukraine outside the gates of the EU and Romania makes its relative stability all the more attractive to investors. Firms with production in Russia or Ukraine are starting to move it to neighboring countries with cheap labor, bringing foreign direct investment to $9.39 billion in January-October 2022, the highest amount in the 10 months after Romania joined the EU.
A survey conducted by Ernst&Young shows that more than half of the 101 foreign companies would have started a business in Romania or would have expanded an existing one, especially from the point of view of supply chains and logistics.
Thus, in terms of foreign investment plans, Romania ranks fourth. “We are optimistic that investments will increase in the coming years, also stimulated by European funds,” said Ernst&Young expert Alex Milcev.
The Romanian Ministry of SMEs currently has at least five possible capacity transfer projects from Russia, Belarus, and Ukraine on the table, with an estimated value of around 700 million euros.
According to the Berlin Ministry of Foreign Affairs, Germany is Romania’s main trading partner and the largest foreign direct investor. Data confirmed by the report “Foreign direct investments in Romania in 2021”, produced by the BNR and published at the end of 2022 that the largest foreign investors in Romania are Germany, Austria, France, Italy, the United States, and the Netherlands.
The net flow of foreign direct investment (FDI) was 8,940 million euros in 2021, about 3 times higher than in the previous year. This value represents the second-highest value of the net FDI flow recorded in Romania, after that of 2008 (9,210 million euros).
From the point of view of guidance on economic activities:
• manufacturing industry – 30% of the total FDI balance
• construction and real estate transactions – 17.4%
• trade – 17.2%
• financial and insurance brokerage – 13.5%
• electricity, gas, and water – 4.9%
• information technology and communications – 4.1%
• professional, scientific, technical, and administrative activities and support services – 4%
• extractive industry – 4%
• agriculture, forestry, and fishing – 2.2%
• transport – 1.5%
• hotels and restaurants – 0.7%
• other assets – 0.4%
