DIPLOMACY ECONOMY SUPPLEMENTS

Gerd Bommer, Austrian Embassy Commercial Counsellor: Austria and Romania enjoy excellent economic relations

The economic relationship between Romania and Austria is a continuous success story with our bilateral trade volume increasing rapidly over the past years. The Romanian-Austrian bilateral trade has gained momentum and in 2017 amounted to EUR 3.64 bn – a new “all-time-high” and a plus of 8.9 % year-on-year. The first half of 2018, the latest figures available as of now, shows a continuation of this highly positive trend, further intensifying our bilateral trade relations: Austrian exports to Romania have increased substantially by 19.6 %, amounting to EUR 1.32 bn, with Romanian exports to Austria also registering a healthy growth of +10.5 %, totaling EUR 0.72 bn.

Even in times of a tougher economic environment, economic ties between Romania and Austria are strengthening: Romania is among Austria’s top 15 economic counterparts worldwide and our most important trading partner in Southeast Europe. For Romania, Austria is the ninth most important import and the twelfth most important export partner.

Austria is also a major investor in Romania. According to the latest available official figures, the overall investment by Austrian companies reached EUR 9.58 bn, amounting to 12.6 % of total foreign direct investments in Romania by end of 2017. Through approximately 1,500 permanently active companies with Austrian capital, our investors create approximately 100.000 direct jobs and are one of the major driving forces of economic development and progress in the country. They therefore are an important pillar of Romania’s society and an active and sustainable partner of its business environment.

These companies provide modern technology, thus boosting productivity and transferring know-how, keep high standards for sustainable and environmentally friendly projects and promote social values. The biggest Austrian investments in Romania were made by OMV acquiring a majority stake in Romania’s Petrom and ERSTE Bank taking over BCR. In fact, these two are the biggest investments ever made by Austrian companies outside of their home country. There are also a number of other large Austrian investments in a multitude of sectors with Austrian companies being particularly strong in banking and insurance, oil and gas, environmental technology and services, real estate, agriculture, construction material and services, wood processing, packaging, transport, logistics and retail.

The economic potential of Romania is without doubt one of the biggest in the EU, based on its widely available natural resources and diversified energy mix combined with its strategic location and a highly educated work force. With growth rates high above the European average for the past years, Romania is increasingly capitalizing on this potential. In contrast to the boom years in 2007 and 2008, Romania has seen more sustainable growth the last couple of years. It therefore remains an interesting investment location for Austrian companies, especially due to the expected positive economic development and the growing importance of its internal market. Over the past months, we have seen intense interest in the market: There have been several new factory openings, mainly expansions of current facilities and branch offices in new geographical areas, which is a clear evidence of the excellent relationship that our countries enjoy. Furthermore, a diverse range of companies was carrying out assessments for potential new investments in the medium term. For the years to come, we therefore expect our economic relationship to tighten even further.

However, Romania still has room for improvement in certain sectors, increasing the attractiveness of its investment location. Especially important are the reduction of bureaucratic hurdles, the strengthening and intensification of vocational training and the creation of a business-friendly environment. This includes a stable and foreseeable economic framework, as investments require long term planning and strategizing which is only possible under steady conditions. Furthermore, trust in political stability as well as reliability and predictability of political decisions are of utmost importance for international investors.

It is a strong statement of a trusted partnership that all major Austrian investors stayed in the Romanian market over the past years. Austrian investors have been a permanent and reliable partner adding to economic stability and strength. Romania has produced extraordinary growth figures over the last years and hopefully continues this path of constant and lasting growth. Austria is proud to be a reliable partner in this process and wishes Romania and its economic progress a sustainable development and a bright future.

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