FDI posts 67% drop
Foreign direct investment attracted by Romania dropped to 203 million euros in February, down 100 million euros from the year-ago period.
Whereas investments went down 67%, the need to finance the current account has more than doubled compared to January-February 2003. Foreign direct investment last year covered only 47% of the current account deficit, whereas in Bulgaria, for instance, FDI covers up to 80% of a deficit that accounts for almost 8% of the Gross Domestic Product. Romania has promised the International Monetary Fund to cut the current account deficit down from 5.9% of GDP this year, to 5.5%.
The authorities expect FDI to amount to two billion euros this year. How
ever, 222 million dollars of this amount will be cashed for a 25% stake in BCR (Romanian Commercial Bank), while money will also come from the sale of SNP (National Oil Company) Petrom and power distributors Electrica Banat and Electrica Dobrogea. In other words, the forecasts are not based on fresh investments that could finally improve the economy's old structure.
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