Foreign investment in Romania expected to halve

Foreign investment in Romania will halve to 4-4.5 billion euro, from 8 billion euros, Governor of the National Bank of Romania (BNR) Mugur Isarescu said on Thursday.

'Capital inputs versus capital outputs in Romania will tend toward zero. In the private non-banking sector there will be net outflows by leasing companies. We expect the flows in the balance of payments to be negative. There will be a financing gap in the private sector. This is one of the reasons why Romania has resorted to a loan from the International Monetary Fund (IMF),' said Isarescu.

He added that Romania has borrowed money off the IMF on preponderantly external grounds.

Romania will remain on the safe side in 2009 in terms of economic evolution, after the agreement to be concluded with the IMF, Mugur Isarescu said.

"Thanks to this agreement, Romania will stay on the safe side in terms of economic evolution this year. The loan agreement will give us more time to do what we need to do, that is to attract structural funds and go ahead with the reforms," the BNR governor said.

Moreover, the BNR official said Romania's short-term debt will shrink, but that the country's reserves will not grow.

Romania is to receive external foreign assistance worth 19.95 billion euros that covers two years.

The International Monetary Fund will grant a loan of 12.95 billion euros; the European Union will contribute 5 billion euros, the World Bank 1.5 billion euros, and other financial institutions will provide another 1 billion euro.

Agerpres