Capital inflows double in 2005

Eugen Radulescu, chairman of CEC (Romanian Savings Bank) estimates Romania saw massive capital inflows, worth over 29.4 billion euros last year, compared to only 14.3 billion euros in 2004. Remittances from Romanian workers abroad exceeded 4.3 billion euros, 40% of which entered the country through informal means, according to the NBR. Massive capital inflows in 2005 are shown in the growth of foreign investments, of speculative capital, which is also reflected in the increase in reserves of the central bank, as well as of private transfers and of employment-related incomes, explains Eugen Radulescu, chairman of CEC. Foreign remittances hit a new record level last year, accounting for 5.6% of the GDP, a two-fold rise compared to two years ago. “The remittances account for a very large share of the GDP, a situation only seen in insular states, which are literally dependent on such transfers,” said Liviu Voinea, research manager of the Applied Economics Group (GEA). ZF