Wednesday, April 14, 2010

AP: Foreign investment in Romania down

Direct foreign investment in Romania dropped sharply for the first two months of the year compared to 2009, the central bank reported Tuesday.

Foreign investment was worth euro466 million (US$633 million) for January and Februray compared to euro1.32 billion (US$1.79 billion) of direct foreign investment in 2009, the National Bank of Romania said.

Less money also came in from Romanians working abroad, the bank said. Some euro874 million (US$1.187 billion) of remittances entered Romania for the first two months of the year, compared to euro1.49 billion (US$2.02 billion) in the same period in 2009, said Adrian Vasilescu, an adviser to the governor of the National Bank of Romania.

Some 2 million Romanians work abroad, most in Spain and Italy which have been hit by the global downturn. Unemployment has risen to 8.36 percent in March with Romanians returning after work abroad has dried up. The International Monetary Fund says 1 million could be unemployed this year, up from the current 765,000.

A few years ago, Romania was one of Europe's fastest growing economies, with annual growth of 8 percent until it was hit by the global economic downturn. Last year it secured an IMF-led bailout loan worth euro20 billion after its economy shrunk 7.1 percent.

Real estate, banking and shopping malls which contributed to much of the business during the boom years are now struggling. The IMF said that Romania's economy would grow by about 1 percent this year, less than earlier predicted.

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