Foreign investments go down

Although the foreign currency denominated subscriptions to share capital made over the four months of PDSR governing were counted according to a more permissive criterion, their level was lower than last year’s.

The value of the hard currency-denominated capital invested in Romania between January and April amounts to 107 million dollars, down 77 million dollars against the 185 million dollars registered over the year-ago period, says the vice-president of the Romanian Trade and Industry Chamber (CCIR), Aurel Vainer.

This is the second time this year when authorities make public the value of investments, although references to foreign investments had vanished since last November from the monthly Statistics Newsletter published by the National Institute of Statistics and Economic Studies.

The new methodology stipulates the share capital increases in companies controlled by foreign investors can be considered foreign investments as well, together with the subscriptions themselves, as well as the decrease of share capital subscribed in hard currency in the case of cancelled companies.

However, analysts feel that this methodology cannot correctly measure the foreign investments either, as the hard currency denominated investments performed by means of credits or other sources and which do not contribute to capital increases are not included in the final result.

As a proof, the “Foreign Investments” chapter within the Newsletter of the National Bank of Romania (NBR), which gathers data from the banks and not from the companies, as CCIR does, points out foreign investments 3-4 times higher for any surveyed interval.

According to CCIR, 2,937 companies with foreign participation in their capital were registered over the same period of time, 466 more than over the year-ago period.

The hard currency denominated subscriptions to the companies’ share capital stand at 6.5 billion dollars for the past 10 years, with half of this amount being directed to Bucharest. The number of registered companies with foreign participation in the share capital stood at 78,283.