Investors’ perception of the economic environment in Romania is moderately optimistic – The Diplomat Bucharest

The Foreign Investors Council (FIC) has published the results of the latest edition of the Business Sentiment Index (BSI) held in September 2022. The responses show that despite the current challenges (inflation, energy market crisis and oil prices utilities, geopolitical context, supply chain bottlenecks, available and adequate labor), investors’ perception of the economic environment in Romania is moderately optimistic.

The business environment takes a more cautious approach to new investment compared to last year’s edition where BSI revealed maximum appetite for investment (since 2014), results that have been captured in the NBR report published at the end of September and which highlight the level of 8.9 billion euros of foreign direct investment in 2021, the second highest value of this indicator after that of 2008.

FIC companies’ investment plans have been impacted by the current crises, however a significant proportion of respondents said they plan to continue to invest (36.9%) and expand workforce plans ( 35.1%) over the next 12 months. However, the number of those who will refrain from new investments (35.1%) has increased considerably compared to the March edition of the same index (10%).

In terms of perceived business growth expectations (both domestic and export), 54% anticipate positive developments for the next year and 61.4% expect revenue growth.

Romania continues to score poorly on infrastructure (58%), bureaucracy (72%), transparency and consistency in policy implementation (76%), while remaining uncompetitive in this regard to the point of view of investors. The legislative environment is considered by most respondents to be less predictable (64.9%).

Moreover, the attractiveness of the Romanian market remains weak in the perception of investors, with a lower rating than previous editions (29.9% against 47.5% in March 2022).

In order to increase investor confidence, it is necessary for the authorities to take measures aimed at the stability, predictability, transparency and clarity of the legislative framework, the extended deadline for the implementation of new measures or instruments by the companies, viability and sustainable solutions to the energy crisis that support all actors and reduce cost pressure, stability of the fiscal environment, as well as reducing bureaucracy and stimulating digitalisation.

Given the complexity of macroeconomic challenges, Romania needs to implement the essential guidelines for long-term economic and social development, measures that have been defined by the business community in collaboration with the authorities within the framework of the Va Urma project. The FIC remains a partner of the Romanian authorities to define a sustainable strategy in order to jointly identify the most effective measures for economic recovery and investment stimulation.

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