Loading ...The international ratings agency Fitch having downgraded Romania’s ratings will not influence the decisions of foreign investors, argue officials of the Romanian Foreign Investment Agency (ARIS).
“We believe the decisions of the Fitch international ratings agency to downgrade Romania’s ratings are unjustified and not correlated with the current macroeconomic developments,” ARIS says in a press release.
ARIS officials back up their assertion by pointing to Romania being expected to record a 9.1% economic growth in 2008, the highest in Europe, and also a projected 5% growth in 2009.
ARIS officials back up their assertion by pointing to Romania being expected to record a 9.1% economic growth in 2008, the highest in Europe, and also a projected 5% growth in 2009.
Likewise, they argue the public debt as a ratio to the Gross Domestic Product (GDP) was just 10.6% in June 2008, the forex reserves reached 27.3 billion euros at end-September, and the external debt of Romania is among the lowest in the European Union.
In terms of foreign investment, Romania has its competitive advantages unchanged thus far, reads the release. In the first nine months of 2008, the total volume of the foreign direct investment advanced 32% from the same period of the year before. Moreover, the Romanian Government has devised an action plan to curb the inflationary trend, prevent a rise in unemployment and to make sure the Government deficit will not grow larger.
Additional measures have also been adopted to boost public investment, including a four-time increase in the appropriations for public investment, as well as private investment, for which state aids worth nearly RON 1 billion (compared with RON 120 million in 2008) will be granted in 2009.
Other concrete support measures include additional deductions for research and development (20% of expenses) and the establishment of guarantee funds (including the Jeremy Fund supporting small and medium-sized enterprises’ access to venture capital, and the rural credit guarantee fund, meant to support access of rural mayoralties to European structural grants).
“Given the context, we believe Romania will continue to be an attractive and profitable destination in the future for capital investments, and the decision of foreign investors will not be influenced by a perfunctory analysis, but by the current macroeconomic developments in the real economy, as well as by economic efficiency calculations.
Because of the world credit crisis, we expect the growth of foreign direct investment drawn by Romania to be moderate in the short run, but when the global crisis has been overcome Romania will be able to draw in significantly larger FDI volumes, because investors will be interested in profitable investment, more than in anything else. We are convinced that Fitch having downgraded Romania’s ratings will not influence the decisions of foreign investors,” reads the ARIS release.
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