The National Institute of Statistics (NIS) significantly revised the data on the negative contribution of investments (gross fixed capital formation) to GDP growth in 2024, from -0.4% to -0.9%. Overall, economic growth was revised down by 0.1 percentage points, to 0.8% of GDP.
Investments were not solely responsible for the severe negative impact on economic growth: industry, agriculture and construction also dragging it down; only trade had a positive effect, fueled by a spectacular increase in consumer loans, money spent on imports.
However, what remains surprising is the negative contribution of investments – which decreased from minus 0.4% to minus 0.9%, given that the Budget had viewed investments as the main growth engine.
„In terms of GDP use, changes in the contribution to GDP growth in 2024, between the two estimates, were recorded by: (…) Gross fixed capital formation, from -0.4% to -0.9%, as a result of the decrease in its volume by 1.6 percentage points from 98.3% to 96.7%,” according to the NIS press release.
Part of the negative impact was offset by the collective final consumption of public administrations (+0.2 pp), following the revision of data on final household consumption (+0.1 pp).
Private investment declined in 2024
Net investments in the national economy increased last year, in current prices, to RON 194 billion, from RON 189 billion in 2023, but decreased by 4.9% in volume, according to other data recently released by the NIS. (Volume indices are calculated taking into account the variation in prices across the main economic sectors.)
The value decrease of net investments last year came from the private sector, as public investments increased in 2024 by 19.4% in nominal terms, according to data from the Ministry of Finance.
Last year, the share of private investment out of the total investment fell to 38% from 46% in 2023.
According to the latest Eurostat data, the share of public investment as a percentage of GDP has increased significantly in Romania as a result of the use of European funds. It is worth noting that, in 2023, Romania already ranked first (5.38% of GDP), surpassing Poland (5.06%) and Hungary (5.33%). In the EU27, the average government investment in 2023 was 3.36% of GDP.
Romania’s economic growth increasingly depends on investment as the consumption engine slows
For 2025, but also in the medium term, economic growth seems to depend mainly on the evolution of investments, in the context of limited domestic and external consumption, according to the latest forecast by NCSP, envisaging a very optimistic advance of 2.5% of GDP this year.
The National Commission for Strategy and Prognosis is taking into consideration a boosting investment activity in the future, given that the resources available through both the Recovery and Resilience Mechanism and the 2021-2027 Multiannual Financial Framework, as well as government resources, will be translated into major infrastructure projects with a multiplier effect in the economy in the medium and long term, NCSP experts claim. „Consequently, gross fixed capital formation, with an average annual rate of 5% and an investment rate that will reach 28.7% in 2028, will represent the main factor of economic growth. Private consumption will advance at an average annual rate similar to that of gross domestic product (2.7%),” a NCSP analysis shows.
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