FIC: Investors’ perception of the economic environment in Romania is moderately optimistic

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

The business environment takes a more cautious approach to new investments compared to last year’s edition when BSI revealed a 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 in foreign direct investments in 2021, the second highest value of this indicator after the one in 2008.

Investment plans of FIC companies have been impacted by current crises, nevertheless a significant proportion of respondents said they plan to continue investing (36.9 percent) and expanding workforce plans (35.1 percent) over the next 12 months. However, the number of those who will abstain from new investments (35.1 percent) has increased considerably compared to the March edition of the same index (10 percent)

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

Romania continues to score low on infrastructure (58 percent), bureaucracy (72 percent), and transparency and consistency in policy implementation (76 percent) while remaining uncompetitive in this respect from the perspective of investors. The legislative environment is considered by most respondents to be less predictable (64.9 percent).

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

In order to increase investors’ confidence, it is necessary for the authorities to take measures that target the stability, predictability, transparency, and clarity of the legislative framework, the extended time for the implementation of new measures or instruments by companies, the viable and sustainable solutions for the energy crisis that support all actors and reduce cost pressure, the stability of the fiscal environment, and also the reduction of bureaucracy and stimulation of digitalisation.

Given the complexity of the macroeconomic challenges, Romania must implement the essential directions for long-term economic and social development, measures that were outlined by the business environment together with the authorities under the umbrella of the Va Urma project. FIC remains a partner for the Romanian authorities to contour a sustainable strategy to identify together the most effective measures for economic recovery and investment stimulation.