June 21 (SeeNews) - Romania's political and regulatory climate is the main short-term barrier to implementing investment, the European Investment Bank (EIB) said on Wednesday.
Although investment in Romania was at a satisfactory level over the last three years, the investment outlook remains mixed and productivity levels are well below the EU average, EIB said in a press release following a joint conference with Romania's central bank, BNR. The conference featured a presentation of the EIB annual survey on investment in Romania.
Foreign direct investments into Romania rose 24% on the year to 1.305 billion euro ($1.46 billion) at the end of April, BNR data showed.
"The survey, which takes place right across Europe including here in Romania, provides us with a powerful policy tool for recognising and attending to firms' investment plans, needs and constraints. With a large staff here on the ground and full support from Luxembourg, the EIB stands ready to finance additional investments made by Romanian businesses," EIB vice-president Andrew McDowell said.
Approximately 12% of Romanian firms face funding constraints, and the call for funding from domestic sources remains high, EIB survey showed. Although access to finance was not reported as a problem in general, there are some firms that face greater difficulties in successfully accessing external sources of funding compared to other firms.
Also, firms in Romania mostly invest in tangibles and relatively few of their resources go into research and development or employee training.
At the forefront of the list of impediments to future investments in Romania the surveyed firms highlighted general uncertainties. Some 60% of companies consider the transport infrastructure of the country an impediment, compared with 38% of EU companies. Other obstacles include regulating the business environment and low availability of skilled labour.
"When credit finances efficient investment, it contributes to an increase in potential output. In particular for small and medium-sized enterprises, the prudent acceleration of the credit engine would be a great opportunity for sustainable development," BNR governor Mugur Isarescu said.
The country overview presents selected findings based on telephone interviews with 476 firms in Romania in July-October 2016. The survey is part of the annual EU-wide EIB Group survey on investment and investment finance of 12 500 firms.
The European Investment Bank is the long-term lending institution of the European Union owned by the EU Member States. It makes long-term finance available for sound investment in order to contribute towards EU policy goals.
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