The Foreign Investors Council (FIC) said on Tuesday that it estimates that Romania will increase and open investment opportunities in 2021 and will register an economic growth above the European average.
Investors confidence in the Romanian market is reflected in the response regarding the investment plan for the next 12 months. More than half of the respondents (51.1%) expect investments to increase in Romanian and only 13% will put them on hold, this result represents the highest score registered since the launch of the Business Sentiment Index (BIS), according to the press release.
FIC explained that the Spring 2021 Economic Forecast by the European Commission presents an improvement in growth prospects compared to last winter forecast. Romania‘s growth forecast of the economy was adjusted to 5.1% for 2021 and 4.9% for 2022, compared to the winter forecast which indicated an increase of 3.8% and 4%, respectively.
The economies of all Member States are expected to return to pre-crisis levels by the end of 2022. The gradual introduction of projects under the Recovery and Resilience Programs contributes to boosting investment growth.
The FIC stated that accelerating the digital transformation, increasing business agility and flexibility, as well as cost optimization, are all important lessons learned and implemented to increase business resilience.
FIC members believe that the next period that is open for opportunities will be characterized by economic growth which may exceed the European average, and the forecasts of the European Commission as well as international institutions (IMF, World Bank) that show that 2021 is indeed shaping up in this direction.
The results of the FIC Business Sentiment Index (BSI) indicator for March 2021 captured the investor’s general optimistic perception of the Romanian business environment, compared to the previous iteration (autumn 2020) when the health crisis was reaching a new peak.
According to FIC members, there is a feeling of moderate optimism about the direction in which their businesses will grow in the next period. The current positive perception can be explained by overcoming the uncertainty of the crisis in the previous months.
“Although the planned investments are significant, the investments allocated to the workforce are expected to grow at a slower pace (33.3% of respondents plan to increase). This could be a result due to the planned investments related to digitization which are not necessarily leading towards new jobs creation,” said The FIC.
“The acceleration of digitization can bring a change in the distribution structure of the foreign direct investment stock, orienting investments towards industries with a higher degree of technological intensity,” added The FIC.