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FDI Reaches Record High
( 01 / December / 2005 )
Foreign direct investment (FDI) in Romania rose to a record EUR5.2bn in 2005, a 26.8% increase on the previous year, despite the absence of any significant privatisation proceeds. The figure came in well above the revised EUR4-4.2bn forecast by the government's investment agency, ARIS. The rise comes on the back of Romania's improved business climate (including the effect of the flat corporate tax), favourable country ratings and the prospect of EU entry as early as January 2007.
Going forward, Romania's future FDI prospects are good, with greenfield investments expected to continue their upward trend. In addition, large privatisation deals are planned this year, including the sale of Romania's biggest bank BCR and state assets in the energy sector. Head of ARIS, Ana Maria Cristina, said last month that she expects Romania to attract a record high level of investment of EUR5.8-6.2bn this year, due to the country's stable economic growth, skilled workforce and relaxed fiscal policy. Sustaining high levels of capital inflow is essential to maintain robust economic expansion and to fund necessary investments. It is also crucial for covering the country's mounting current account deficit, which widened to EUR6.89bn (US$8.2bn) in 2005, an estimated 9% of GDP.
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