A drop in capital inflows generally spells bad news for the local economy since it may indicate a decline in investor appetite, but the decline of foreign direct investment in 2020 was at least in part also influenced by activity halts during lockdown in March-May.
In the second half of 2020, foreign capital inflows in the financial industry were lower compared with the first half of the year.
Nearly 70% of capital inflows in 2020 went to banks (30.5%) and insurance companies (39.2%). Parent companies injected RON62.5 million in local banks and RON79.7 million in local insurance companies.
The biggest capital inflow in 2020 went to Omniasig. Vienna Insurance Group (VIG), injected RON42.5 million in its biggest local insurer in February 2020.
The second largest capital inflow last year went to the banking sector, where Banca Romana de Credite si Investitii (BRCI) received RON35 million in capital in June from its parent company, GFG Alliance.
The third largest capital injection of 2020 was in insurance, as Dutch group NN injected RON31.9 million into its local business for a new general insurance business line.
Total foreign direct investment in Romania stood at EUR1.92 billion in 2020, compared with EUR4.85 billion in 2019, central bank data showed. Of total FDI, equity stakes (including estimated net reinvestment of earnings) amounted to EUR3.95 billion, while net intra-group lending stood at negative EUR2.03 billion.