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flag Romania Romania: Economic and Political Outline

In this page: Economic Indicators | Foreign Trade in Figures | Sources of General Economic Information | Political Outline

 

Economic Indicators

Since the early 1990s, successive governments have gradually promoted a liberal economic policy to privatize the state owned companies. Following its accession to the European Union in January 2007, Romania has begun a new phase of economic growth with substantial foreign investments. Like many other countries of the former Soviet bloc, its economy has been transformed into a market economy. The GDP has grown at a regular rhythm and a middle class has developed. Romania has become the second most dynamic country in the region after Poland. The unemployment rate, which was quite low before the financial crisis, has been growing since 2008 and reached 7.5% in 2013. Romania has one of the lowest public debts in the EU (38.2% of the GDP in 2013) and inflation was stabilized, and then reduced, at 4.5% in 2013.

However, even if Romania enjoys a significant potential, notably due to its rich agricultural land and its well-educated and high-qualified workforce, it still remains one of the poorest countries in Europe with a poverty rate of 6% of the population. Due to the financial crisis, Romania endured a strong economic slowdown, especially in the automobile sector which is subject to foreign demand and the country entered into recession in 2009-2010. Funding difficulties pushed Romania to get financial help from the IMF, the European Commission and the World Bank. The country managed to reduce its public deficit to 2.4% of the GDP in 2013. It  renewed with economic growth in 2012 (+1.5%) and then in 2013 (2.5%), with a 2014 forecast of 2.1%. industrial production increased by 4.7% in 2013.

Romania maintains its objective of joining the Euro zone in 2015.

 
Main Indicators 20112012201320142015 (e)
GDP (billions USD) 183.56169.18188.89202.47215.30
GDP (Constant Prices, Annual % Change) 2.30.63.5e2.42.5
GDP per Capita (USD) 8,5847,929810,16110,859
General Government Balance (in % of GDP) -3.6-1.8-1.8e-1.4e-1.0
General Government Gross Debt (in % of GDP) 34.338.239.4e39.9e39.6
Inflation Rate (%) 5.83.34.01.5e2.9
Unemployment Rate (% of the Labor Force) 7.47.07.37.27.1
Current Account (billions USD) -8.24-7.51-2.02-2.38-3.77
Current Account (in % of GDP) -4.5-4.4-1.1e-1.2e-1.8

Source: IMF - World Economic Outlook Database , Last Available Data

Note: (e) Estimated Data

Main Sectors of Industry

Agriculture represents 6.5% of Romania's GDP and employs 28% of the country's active population. The main resources and agricultural production in Romania are cereals, sugar beets and potatoes. However, the production remains very low in comparison with the country's potential capacity. About 25% of the country is covered by forest (especially around Transylvania) and the logging industry is developing very fast.

The industrial sector has contributed to 38.3% of the country's GDP and employed a third of the active population (33%). Historically, the manufacturing companies and the industrial sectors represent the backbone of Romania's economy. That is why many foreign direct investors are involved in heavy industry (metallurgy, steel), the manufacturing of vehicle parts, building and construction, petroleum refining and textiles. However, during the last few years, new technologies have been moving forward due to the growth of high-qualified workforce whose cost is lower than the European average.

Romania's economy is mainly centered in the services sector, which represents 51.7% of the GDP and employs around 39% of the nation's workforce. Tourism, in particular, is booming.

 
Breakdown of Economic Activity By Sector Agriculture Industry Services
Employment By Sector (in % of Total Employment) 29.0 28.6 42.4
Value Added (in % of GDP) 6.4 43.2 50.4
Value Added (Annual % Change) -22.4 -0.9 5.4

Source: World Bank - Last Available Data.

 
 
 
Monetary Indicators 20092010201120122013
Romanian New Leu (RON) - Average Annual Exchange Rate For 1 USD 3.053.183.053.473.33

Source: World Bank - Last Available Data.

 
 

Learn more about Market Analyses about Romania on Globaltrade.net, the Directory for International Trade Service Providers.

Indicator of Economic Freedom

Definition:

The Economic freedom index measure ten components of economic freedom, grouped into four broad categories or pillars of economic freedom: Rule of Law (property rights, freedom from corruption); Limited Government (fiscal freedom, government spending); Regulatory Efficiency (business freedom, labor freedom, monetary freedom); and Open Markets (trade freedom, investment freedom, financial freedom). Each of the freedoms within these four broad categories is individually scored on a scale of 0 to 100. A country’s overall economic freedom score is a simple average of its scores on the 10 individual freedoms.

Score:
65.5/100
Position:
Moderately Free
World Rank:
62/178
Regional Rank:
29/43

Distribution of Economic freedom in the world
Source: 2014 Index of Economic freedom, Heritage Foundation

 

Business environment ranking

Definition:

The business rankings model measures the quality or attractiveness of the business environment in the 82 countries covered by The Economist Intelligence Unit’s Country Forecast reports. It examines ten separate criteria or categories, covering the political environment, the macroeconomic environment, market opportunities, policy towards free enterprise and competition, policy towards foreign investment, foreign trade and exchange controls, taxes, financing, the labour market and infrastructure.

Score:
6.47
World Rank:
47/82

Source: The Economist - Business Environment Rankings 2014-2018

 

Country Risk

See the country risk analysis provided by Coface.

 

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Foreign Trade in Figures

Romanian exports have increased by almost 30% between 2006 and 2008. Imports have followed the same trend but with a volume of about twice that of export (an increase of almost 60%). Since then, Romania has remained very dependent on imports. The global economic crisis has accentuated the deficit in the balance of payments since 2009. In addition, Romania's main partners are also in economic difficulties themselves and the level of exports has decreased in a parallel way. the industrial production has increased by 4.7% in 2013 and agriculture also increased by 5%. However exports, going in the proportion of 55% to a euro zone in recession, have dropped.

Romania's main export partners in 2013 were Germany (around 18% of exports), Italy, France and Turkey. The country traditionally and mainly exports industrial products. In 2013, the deficit of the country's trade balance has not decreased and it should remain in 2014.

Romania's main suppliers are Germany (around 17% of imports), Italy, Hungary and France. Imports have been rising since 2011. This growth can be explained essentially by the needs of export-oriented industrial activity. The strongest growth was therefore recorded in imports of electric and mechanical equipment and metal products (25% and 31% respectively), while the part of imports of consumer goods has been smaller.

Trade results in 2014 will depend on the dynamism of the euro zone economies.

 
Foreign Trade Indicators 20092010201120122013
Imports of Goods (million USD) 54,32462,12876,47670,20873,398
Exports of Goods (million USD) 40,56749,49963,01257,82465,835
Imports of Services (million USD) 10,0978,1049,4739,22310,142
Exports of Services (million USD) 9,7688,75310,04810,72813,632
Imports of Goods and Services (Annual % Change) -21.412.510.3-0.8-
Exports of Goods and Services (Annual % Change) -6.314.210.9-3.1-
Imports of Goods and Services (in % of GDP) 36.641.245.445.242.5
Exports of Goods and Services (in % of GDP) 30.635.440.040.042.0
Trade Balance (million USD) -12,038-11,885-12,525-11,471-7,286
Trade Balance (Including Service) (million USD) -10,028-9,489-9,879-8,036-904
Foreign Trade (in % of GDP) 67.276.685.485.184.5

Source: WTO - World Trade Organization ; World Bank , Last Available Data

 

Main Partner Countries

Main Customers
(% of Exports)
2013
Germany 18.5%
Italy 11.5%
France 6.8%
Turkey 5.1%
Hungary 4.9%
See More Countries 53.1%
Main Suppliers
(% of Imports)
2013
Germany 18.6%
Italy 11.0%
Hungary 8.2%
France 5.7%
Poland 4.4%
See More Countries 52.0%

Source: Comtrade, Last Available Data

 
 

Main Products

- bn USD of products exported in 2013
Parts and accessories for tractors, motor vehicles...Parts and accessories for tractors, motor vehicles for the transport of ten or more persons, motor cars and other motor vehicles principally designed for the transport of persons, motor vehicles for the transport of goods and special purpose motor vehicles of heading 8701 to 8705, n.e.s. 6.9%
Motor cars and other motor vehicles principally...Motor cars and other motor vehicles principally designed for the transport of persons, incl. station wagons and racing cars (excl. motor vehicles of heading 8702) 6.4%
Insulated incl. enamelled or anodised wire, cable...Insulated incl. enamelled or anodised wire, cable incl. coaxial cable and other insulated electric conductors, whether or not fitted with connectors; optical fibre cables, made-up of individually sheathed fibres, whether or not assembled with electric conductors or fitted with connectors 5.4%
Petroleum oils and oils obtained from bituminous...Petroleum oils and oils obtained from bituminous minerals (excl. crude); preparations containing >= 70% by weight of petroleum oils or of oils obtained from bituminous minerals, these oils being the basic constituents of the preparations, n.e.s.; waste oils containing mainly petroleum or bituminous minerals 4.1%
New pneumatic tyres, of rubberNew pneumatic tyres, of rubber 2.3%
See More Products 75.0%
- bn USD of products imported in 2013
Petroleum oils and oils obtained from bituminous...Petroleum oils and oils obtained from bituminous minerals, crude 5.7%
Medicaments consisting of mixed or unmixed...Medicaments consisting of mixed or unmixed products for therapeutic or prophylactic uses, put up in measured doses incl. those in the form of transdermal administration or in forms or packings for retail sale (excl. goods of heading 3002, 3005 or 3006) 3.9%
Parts and accessories for tractors, motor vehicles...Parts and accessories for tractors, motor vehicles for the transport of ten or more persons, motor cars and other motor vehicles principally designed for the transport of persons, motor vehicles for the transport of goods and special purpose motor vehicles of heading 8701 to 8705, n.e.s. 3.6%
Petroleum oils and oils obtained from bituminous...Petroleum oils and oils obtained from bituminous minerals (excl. crude); preparations containing >= 70% by weight of petroleum oils or of oils obtained from bituminous minerals, these oils being the basic constituents of the preparations, n.e.s.; waste oils containing mainly petroleum or bituminous minerals 2.2%
Insulated incl. enamelled or anodised wire, cable...Insulated incl. enamelled or anodised wire, cable incl. coaxial cable and other insulated electric conductors, whether or not fitted with connectors; optical fibre cables, made-up of individually sheathed fibres, whether or not assembled with electric conductors or fitted with connectors 2.1%
See More Products 82.4%

Source: Comtrade, Last Available Data

 
See More Products
More imports (Intracen Data)
More exports (Intracen Data)
 
 
 

Main Services

- bn USD of services exported in 2011
30.72%
25.88%
14.04%
10.29%
7.12%
4.55%
2.43%
1.93%
1.32%
1.24%
0.47%
- bn USD of services imported in 2011
25.51%
20.38%
19.40%
6.28%
6.01%
5.15%
5.01%
3.71%
3.68%
3.40%
1.45%

Source: Comtrade, Last Available Data

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Sources of General Economic Information

Ministries
Romanian Ministry of the Economy and Finance
Statistical Office
National Institute of Romanian Statistics
Central Bank
National Bank of Romania
Stock Exchange
Bucharest Stock Exchange
Search Engines
Rol
Cautare Avansata (in Romanian)
Romanian Voice
Economic Portals
Portal Info
Afacerinet

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Political Outline

Executive Power
The president is the head of the state and is elected by universal suffrage for a term of five years. The president is also the commander in chief of the army and is responsible for protecting the constitution. Under the Romanian constitution, the president acts as a mediator between the various centers of power in the country. The Prime Minister is appointed by the President (and is usually the leader of the majority party) for a term of four years. The Prime Minister is the head of government and holds executive power, including law enforcement and management of the affairs of the country. The Council of Ministers is appointed by the Prime Minister.
Legislative Power
The legislature in Romania is bicameral. The Parliament consists of: Senate (the upper house) having 137 seats and the Chamber of Deputies (the lower house) having 332 seats. The members of both houses are elected by direct, popular vote on a proportional representation basis to serve four-year terms. The executive branch of the government is directly or indirectly dependent on the support of the parliament, often expressed through a vote of confidence. Prime Minister does not have the power to dissolve the Parliament directly, but President can do so after consultation with the political parties represented in the Parliamnet. The people of Romania have considerable political rights.
Main Political Parties
Romania has a multi-party system in which the parties usually agree to form coalition governments. The country's main parties are: - The PSD (Social Democrat Party) - which follows the social democratic ideology, - The PNL (National Liberal Party) - advocates liberalism, both economic and social - The PD (Democratic Party ) - follows the ideology of the center-right - PC (Conservative Party) - advocates family values and nationalism, without chauvinism, - The PRM (Party of Great Romania) - is nationalist extreme right.
Current Political Leaders
President: Klaus Iohannis (since 16 November 2014) - PNL
Prime Minister: Victor-Viorel PONTA (since 7 May 2012) - PSD
Next Election Dates
Presidential: November-December 2019
 

Indicator of Freedom of the Press

Definition:

The world rankings, published annually, measures the violations of press freedom worldwide. It reflects the degree of freedom enjoyed by journalists, the media and digital citizens of each country and the means used by states to respect and uphold this freedom. Finally, a note and a position are assigned to each country. To compile this index, Reporters Without Borders (RWB) prepared a questionnaire sent to partner organizations,150 RWB correspondents, journalists, researchers, jurists and activists of human rights, including the main criteria - 44 in total - to assess the situation of press freedom in a given country. It includes every kind of direct attacks against journalists and digital citizens (murders, imprisonment, assault, threats, etc.) or against the media (censorship, confiscation, searches and harassment etc.).

World Rank:
45/180
Evolution:
3 places down compared to 2013

Source: Worldwide Press Freedom Index 2014, Reporters Without Borders

 

Indicator of Political Freedom

Definition:

The Indicator of Political Freedom provides an annual evaluation of the state of freedom in a country as experienced by individuals. The survey measures freedom according to two broad categories: political rights and civil liberties. The ratings process is based on a checklist of 10 political rights questions (on Electoral Process, Political Pluralism and Participation, Functioning of Government) and 15 civil liberties questions (on Freedom of Expression, Belief, Associational and Organizational Rights, Rule of Law, Personal Autonomy and Individual Rights). Scores are awarded to each of these questions on a scale of 0 to 4, where a score of 0 represents the smallest degree and 4 the greatest degree of rights or liberties present. The total score awarded to the political rights and civil liberties checklist determines the political rights and civil liberties rating. Each rating of 1 through 7, with 1 representing the highest and 7 the lowest level of freedom, corresponds to a range of total scores.

Ranking:
Free
Political Freedom:
2/7

Map of freedom 2014
Source: Freedom House

 

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Last Updates: December 2014