The National Bank of Romania has published the annual report regarding the Foreign direct investment in Romania for 2018.
As shown in the annual report, in 2018, FDI net flows stood at EUR 5,266 million, out of which:
- Foreign direct investors’ equity in direct investment enterprises in Romania worth EUR 5,546 million. Equity included equity capital in FDI enterprises worth EUR 2,973 million, plus reinvestment of earnings worth EUR 2,573 million. Reinvestment of earnings resulted from the after-tax profit of profitable FDI enterprises amounting to EUR 8,930 million, less the distributed dividends worth EUR 3,551 million and the loss of EUR 2,807 million of FDI enterprises that incurred losses in 2018. Calculations are made in compliance with the international methodology for determining reinvestment of earnings of FDI enterprises (BPM6).
- Debt transactions of direct investment enterprises with their foreign direct investors, loans from fellow companies included, stood at EUR -280 million (lending to direct investors exceeded borrowing from direct investors). Both long-term and short-term instruments are included.
In 2018, FDI net flows went primarily to trade (EUR 1,580 million), followed by manufacturing (EUR 1,362 million). The main industrial sub-sectors benefiting from foreign direct investment were transport equipment (EUR 337 million), food, beverages and tobacco (EUR 329 million) and oil processing, chemical, rubber and plastic products (EUR 205 million). Other economic activities which received large FDI inflows were financial intermediation and insurance (EUR 896 million), and construction and real estate transactions (EUR 581 million).
The following sectors reported the largest equity capital (capital increases): manufacturing (EUR 1,016 million), construction and real estate transactions (EUR 594 million) and trade (EUR 335 million).
The highest values for reinvestment of earnings were recorded by manufacturing (EUR 991 million), trade (EUR 843 million) and financial intermediation and insurance (EUR 592 million).
In 2018, the intercompany net debt transactions made a negative contribution (EUR -280 million) compared to a positive contribution of EUR 829 million in 2017. By economic activity of FDI enterprises, the main sector that benefited from financing via intercompany lending was trade (EUR 401 million).
As at end-2018, the FDI stock amounted to EUR 81,124 million. The result was calculated by adding to the FDI stock at the end of the previous year the FDI net flows (transactions) and the other flows (components leading to stock changes, namely positive/negative adjustments arising from revaluations of foreign currency assets – following the changes in the exchange rate, the revaluation of some tangible fixed asset prices, as well as the changes in the market value of listed FDI enterprises – changes in the accounting treatment of opening positions and data corrections in the previous statistical reports).
Equity positions (including the accumulated reinvestment of earnings) of FDI enterprises amounted to EUR 57,479 million (70.85 percent of the FDI stock) at end-2018 and debt positions in relation to direct investors (fellow debt included) reached EUR 23,645 million, i.e. 29.15 percent of the closing FDI stock.
Debt positions are calculated as FDI enterprises’ borrowings from foreign direct investors, including from non-resident companies in the group the direct investor belongs to (EUR 31,600 million), net of the loans granted by FDI enterprises to foreign direct investors and the non-resident companies in the group the direct investor belongs to (EUR 7,955 million).
For further information: Annual Report: Foreign Direct Investment in Romania in 2018