Foreign investments in Romania halved during the pandemic, climbing down below EUR 2 bln

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Non-residents’ direct investments in Romania totalled EUR 1.9 billion last year compared to EUR 4.8 billion in 2019, according to the National Bank (BNR)’s “Balance of payments and external debt” report released on Monday.

The foreign investments’ equity (including the estimated net reinvestment of earnings) and intercompany lending recorded net values of EUR 3,953 million and EUR -2,032 million respectively.

At the same time, in January – December 2020, the balance-of-payments current account posted a deficit of EUR 10,983 million, compared with EUR 10,480 million in the same year-ago period. The deficit on trade in goods widened by EUR 1,371 million, the surplus on services increased by EUR 981 million, the primary income balance saw its deficit expand by EUR 656 million and the surplus of the secondary income balance rose by EUR 543 million.

Balance of payments current account (EUR million)

January – December 2019p January – December 2020p
CREDIT DEBIT BALANCE CREDIT DEBIT BALANCE
CURRENT ACCOUNT (A+B+C) 101,989 112,469 -10,480 92,356 103,339 -10,983
A. Goods and services 90,143 98,915 -8,772 81,015 90,177 -9,162
a. Goods 63,085 80,509 -17,424 57,579 76,374 -18,795
b. Services 27,058 18,406 8,652 23,436 13,803 9,633
– manufacturing services on physical inputs owned by others 2,969 164 2,805 2,531 135 2,396
– transport 7,966 3,629 4,337 6,795 2,595 4,200
– tourism-travel 3,195 5,360 -2,165 1,252 2,631 -1,379
– other 12,928 9,253 3,675 12,858 8,442 4,416
B. Primary income 6,295 9,487 -3,192 5,571 9,419 -3,848
C. Secondary income 5,551 4,067 1,484 5,770 3,743 2,027

 

In January – December 2020, total external debt increased by EUR 15,669 million, of which:

  • long-term external debt at end-December 2020 totalled EUR 91,276 million (72.8 percent of total external debt), up 22.8 percent against end-2019;
  • short-term external debt at end-December 2020 amounted to EUR 34,176 million (27.2 percent of total external debt), down 3.6 percent from end-2019.

Long-term external debt service ratio ran at 18.6 percent in January – December 2020 against 19.3 percent in 2019. At end-December 2020, goods and services import cover stood at 5.7 months, as compared to 4.5 months at end-2019.

At end-December 2020, the ratio of the National Bank of Romania’s foreign exchange reserves to short-term external debt by remaining maturity came in at 88.4 percent, against 68.8 percent at end-2019.

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