BNR-EIB survey: Political and regulatory climate, the main short-term barrier to implementing investment

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Romania still needs strong investment. Over the last three years, the investment was the right amount, only 12 percent of firms being finance constrained. However, the investment outlook in Romania is mixed.

Political and regulatory climate is the main short-term barrier to implementing investment and productivity levels are well below the EU average, BNR-EIB survey reveals.

Nearly three quarters of firms report that they have invested the right amount over the last three years. At the same time the share of firms that think they have invested too little is higher in Romania than among EU peers. EIBIS also reveals that firms with too little investment rank their capital stock to be of lower quality – implicitly signaling investment backlog. Overall, Romanian companies find their capital stock of lower quality compared to EU-peers, too.

Firms in Romania mostly invest in tangibles and relatively few resources go into Research and Development and employee training.

High reliance on internal sources typically poses bigger obstacles for small and innovative firms. While general uncertainty tops the list of impediments to future investment in the EU and Romania, the share of Romanian companies considering the country’s transport infrastructure as an impediment stands out – about 60 percent see it as an obstacle compared to 38 percent in the EU. Also business regulation and the limited availability of skilled staff pose impediments.

“When credit finances efficient investment, it contributes to an increase in potential output. In particular for small and medium-sized enterprises, the prudent acceleration of the credit engine would be a great opportunity for sustainable development,” Mugur Isarescu, Governor of the National Bank of Romania (BNR), stated attending the launch event of the study.

Romania’s overview presents selected findings based on telephone interviews with 476 firms in Romania in July-October 2016. The survey is part of the annual EIB Group Survey on Investment and Investment Finance (EIBIS) is an EU-wide survey of 12,500 firms that gathers quantitative information on investment activities by both SMEs and larger corporates, their financing requirements and the difficulties they face.


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