The volume of foreign direct investments (FDI) min Romania nearly tripled to EUR 4.41 bln in January - August, compared to the same period last year, the National Bank of Romania announced.

However, out of the EUR 4.41 bln total FDI in the first eight months of the year, only one quarter (EUR 1.11 bln) was equity investments, with the rest being either reinvested earnings (EUR 2.70 bln) or loans extended to local subsidiaries by parent groups (EUR 607 mln).

The rolling 12-month total FDI has indeed returned to pre-crisis levels, EUR 5.90 bln (2.6% of GDP) as of August - compared to a current account (CA) deficit of EUR 14.6 bln (6.5% of GDP).

However, the equity FDI (core FDI) over the rolling 12-month period was only EUR 1.58 bln - just over a quarter of the total FDI.

Nearly three-quarters of the FDI as reported in August for the past 12 months was formed by either the profits generated by subsidiaries of foreign groups (reinvested earnings) or loans borrowed by local subsidiaries from their foreign owners.

(Photo: Wanida Prapan/ Dreamstime)

iulian@romania-insider.com