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BUCHAREST (Romania), October 16 (SeeNews) - The foreign investors' council in Romania, FIC, said on Wednesday that investor confidence remains low following numerous controversial attempts to modify the fiscal framework, while poor infrastructure and bureaucracy are making the country uncompetitive.
Investors' trust in the legislative environment stays low following several fiscal overhaul attempts but has not deteriorated further, FIC said in a statement accompanying its annual business sentiment index survey.
"Romania continues to score poorly on infrastructure and regulatory burden. Investors have no option but to adapt to the “new normal”, that is a situation of constant lack of predictability where anything might happen at any time. Studies have shown that this lack of predictability has a significant impact on investments, albeit one difficult to quantify," FIC said.
A total of 46 of FIC's 125 members responded in the survey.
Some 22.2% of the respondents said that the business environment in Romania has significantly worsened recently, while 31.1% think it has deteriorated slightly. No one sees a significant improvement recently in the local business environment, while only 13.3% see a slight improvement.
Some 47.3% expect business growth in the following period, while 13.3% expect a setback, data showed.
However, only 11.1% expect their revenues to contract in 2020, down 23.9% in the previous survey published in March 2019, while 53.3% expect higher revenues next year.
According to FIC, the most worrying indicator right now and the one that continues its steep decline with every edition of the sentiment index for the past three years now is the availability of adequate workforce, with two-thirds of respondents saying they are unable to find adequate workforce. This is for the first time when more than half of the respondents of the FIC sentiment index reported facing this problem, the council said.
Foreign direct investment (FDI) into Romania rose by 2.84% year-on-year in the first eight months of 2019, to 3.581 billion euro ($3.952 billion), the latest data available from the country's central bank shows.
FIC member companies represent a significant share of foreign direct investment in Romania. They have more than 185,000 employees and a total turnover equal to about a quarter of the country's GDP.
($= 0.9063 euro)