Investment worth 2.3 million euro in the economy in Q1

In the first quarter of 2007 net investments in the economy rose to RON 7.7 billion (€2.3 million), a 16 percent increase from Q1 2006, of which more than half is made up of new construction work, according to the National Institute of Statistics (INS). Net investments include expenses for new capital assets, developing, modernizing and reconstructing old ones, and the value of services related to property transfer of existing fixed assets and lands bought from other units or individuals.
New construction projects prevail in the investment structure, at RON 3.8 billion (€1.16 billion) while RON 3.36 billion (€1.03 billion) were invested in machinery and equipment. Investments were mainly made in construction, wholesale and retail, repair of vehicles, motorcycles and personal assets, electricity, heating, gas and water, communications, and the food and drinks industry.
Compared to Q1 2006, in the first quar¬ter of 2007 the new construction work ratio in total investments rose by 6.4 percentage points and by 1.5 percentage points for other expenditures, while the machinery ratio (including transportation means) dropped by 7.9 percentage points.
The fast pace in the construction sector and especially its majority ratio in terms of total investments point to a consumption orientation of the latter, which may be worrisome, according to Daniel Daianu, Professor of Economics and former Minister of Finance.
Daianu considers that the 6 percent economic growth is close to the market’s potential, and the fact that it scored below expectations need in no wise be cause for concern.
“Figures indicate a drop in the retail sector, while industry continues its development. There are other aspects we should be worried about, such as the appreciation of the leu and the dynamics of salaries”, said Daianu.