IHS Global Insight analyst: Romania could join the Euro zone around 2020 | Natural resources are attractive for FDI

Setting a clear timetable for the adoption of the euro could help Romania attract more foreign direct investments in the next years, according to Sara Johnson, senior research director for global economics at IHS Global Insight, a corporate data provider.

Romania has been mentioned among the FDI hotspots in emerging Europe alongside the Czech Republic, Serbia, Slovakia and Turkey, in a recent report published by IHS

“Romania’s low labor costs, privatization opportunities and natural resources also make up an attractive package for businesses looking to invest,” said Johnson.

The company forecasts that the local economy will continue to grow at annual rate of more than 3 percent through 2018. From 2019 to 2025, IHS analysts say growth will go below 3 percent each year.

“Our forecast does not anticipate shocks that would divert growth from its long-run potential path.  Growth will slow as the unemployment rate drops below 5%. The population is declining 0.7% per year and skilled labor will become scarce,” Johnson told BR.

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Asked how Romania can further increase FDI, the analyst mentionted the sustained growth in European export markets, the privatization of state-owned enterprises, a timetable for euro adoption, a steady supply of skilled labor and the prioritization of the anti-corruption drive.

She added that Romania could receive Euro zone membership around 2020.

Johnson said that the country still has natural resources that could attract investments, including natural gas, iron ore, manganese, copper, zinc, nickel, numerous other minerals and agricultural land.

Ovidiu Posirca