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In 2015, Ro­ma­nia’s econ­omy is ex­pected to ex­pand by around 3.0%, ac­cord­ing to fore­casts of the World Bank, the Euro­pean Bank for Re­con­struc­tion and Devel­op­ment, and the In­ter­na­tional Mon­e­tary Fund. Strong pri­vate con­sump­tion, backed by ris­ing wages and low in­fla­tion, grow­ing ex­ports to the EU coun­tries and a re­cov­ery in for­eign in­vest­ments will sup­port the coun­try’s eco­nomic ex­pan­sion.

Ro­ma­nia's eco­nomic growth slowed down to 2.8% in 2014 but re­mained one of the sharpest in South­east Europe (SEE). It came on the back of solid do­mes­tic con­sump­tion, in­creas­ing ex­ports, mainly to the EU, and an up­trend in the in­dus­trial and ser­vices sec­tors. The key chal­lenges facing the Ro­ma­nian govern­ment are to main­tain a steady growth pace with­out, how­ever, jeop­ar­diz­ing the fis­cal sta­bil­ity. The coun­try should make fur­ther progress with struc­tural re­forms and cut­ting red tape, as well. Ro­ma­nia was also ac­tive on the debt mar­ket in 2014, sell­ing some 40.6 bil­lion lei (9.1 bil­lion euro) and 928.7 mil­lion euro in govern­ment debt pa­per on the do­mes­tic mar­ket, and rais­ing 2.0 bil­lion U.S. dol­lars in 10-year and 30-year bonds on the U.S. mar­ket and 2.75 bil­lion euro in ten-year bonds on in­ter­na­tional mar­kets.

In terms of busi­ness environment, Ro­ma­nia climbed up to the 48th place out of 189 coun­tries with a score of 70.22 points in the World Bank's Do­ing Busi­ness 2015 re­port. In the 2014 edi­tion of the re­port, Ro­ma­nia ranked 50th with a score of 68.48 points. The coun­try im­proved no­tably its stand­ings in the Pay­ing Taxes cat­e­gory, largely thanks to the launch of an elec­tronic sys­tem for fil­ing and pay­ing taxes.

Ro­ma­nia made very good progress in terms of com­pet­i­tive­ness, ac­cord­ing to the Global Com­pet­i­tive­ness Re­port 2014-2015 pub­lished by the World Eco­nomic Fo­rum. The coun­try ranked 59th out of 144 coun­tries, af­ter end­ing up 76th among 148 economies a year ear­lier. Ac­cord­ing to the re­port, the key fac­tors lim­it­ing Ro­ma­nia's com­pet­i­tive­ness are ac­cess to fi­nanc­ing, tax rates, and in­ad­e­quate sup­ply of in­fra­struc­ture.

Ro­ma­nian em­i­grants sup­ported the Ro­ma­nian econ­omy with 2.8 bil­lion euro in re­mit­tances in 2014, ac­cord­ing to data pro­vided by the World Bank. Em­i­grants in Italy con­trib­uted the most, ac­count­ing for 29.3% of the to­tal sum. Other ma­jor con­trib­u­tors were the Ro­ma­ni­ans liv­ing in Spain and Ger­many,

whose re­mit­tances ac­counted for 23.2% and 13.2% of the to­tal, re­spec­tively.

The coun­try's nom­i­nal gross do­mes­tic prod­uct (GDP) to­talled 666.637 bil­lion lei in cur­rent prices, grow­ing by a real 2.8% in 2014, ac­cord­ing to the Na­tional In­sti­tute of Sta­tis­tics, INS.

Fi­nal con­sump­tion, which con­trib­uted 76.9% to GDP, in­creased by 4.6% in 2014. Gross cap­i­tal for­ma­tion went down by 3.6%, con­tribut­ing 23.2% to the GDP. Ex­ports in­creased by 8.1%, while im­ports rose slower, by 7.7%.

The gross value added (GVA) gen­er­ated by the na­tional econ­omy in­creased by 2.6% in 2014 and to­talled 589.029 bil­lion lei. The in­dus­trial sec­tor grew by 3.6% in terms of vol­ume and its share in the GVA struc­ture in­creased to 27.3% from 27.0% in 2013. The in­for­ma­tion and com­mu­ni­ca­tion sec­tor ex­pe­ri­enced the sharpest an­nual rise, of 8.2%. The agri­cul­tural sec­tor was hit by floods but reg­is­tered an an­nual in­crease of 1.5%, while nar­row­ing its share in the GVA to 5.4% from 6.2%. Con­struc­tion inched up by 0.3% and ac­counted for 7.1% of the GVA.

In­dus­trial out­put went up by 6.1% in 2014. The man­u­fac­tur­ing and the min­ing sec­tors grew by 7.5% and 1.0%, re­spec­tively, while the elec­tric­ity, wa­ter and gas sup­ply sec­tor fell by 4.7%. Man­u­fac­tur­ing of com­puter, elec­tronic and op­ti­cal prod­ucts was the seg­ment to re­port the high­est an­nual pro­duc­tion growth, of 53.9%, while the out­put of min­ing other than coal and lig­nite de­clined the most, by 5.8%.

An­nual in­fla­tion slowed down to 0.8% in De­cem­ber 2014, from 1.6% a year ear­lier. Av­er­age an­nual in­fla­tion was 1.1%, while the EU-har­mo­nized Consumer Price In­dex was up 1.4% on the year.

Un­em­ploy­ment in the coun­try dropped to 6.8% of the to­tal labour force in 2014 from 7.2% a year ear­lier, ac­cord­ing to INS data. The em­ployed population aged 15 years and above was 8.6 mil­lion in 2014, down by 6.8%. The un­em­ploy­ment rate among peo­ple aged be­tween 15 and 24 went up to 24%, from 23.6% a year ear­lier.

Broad money (money ag­gre­gate M3) de­creased by 8.2% and reached 261.4 bil­lion lei in 2014, ac­cord­ing to data pro­vided by Na­tional Bank of Ro­ma­nia. The M2 money sup­ply also grew, by 8.2%, to 261.1 bil­lion lei. Money ag­gre­gate M1, or nar­row money, jumped by 17.8% to 118.1 bil­lion lei in 2014.

Loans to the non-govern­ment sec­tor to­talled 208 bil­lion lei in De­cem­ber 2014, down by 3.5% year-on-year. Loans to non-fi­nan­cial cor­po­ra­tions fell by 6.3% to 105.3 bil­lion lei, house­hold loans inched down 0.4% to 102.8 bil­lion lei and home pur­chase loans climbed up by 14.6% to 46.8 bil­lion lei, while consumer loans went down by 10.5%.

The coun­try's gross ex­ter­nal debt de­creased to 94.3 bil­lion euro in 2014, shrink­ing by 3.8%, or 3.77 bil­lion euro, as com­pared to 2013. Longterm li­a­bil­i­ties amounted to 63.5 bil­lion euro, or 67.3% of the to­tal debt, and short-term li­a­bil­i­ties to­talled 9.9 bil­lion euro, equal to 10.5% of the to­tal debt.

For­eign di­rect in­vest­ment (FDI) dropped by 10.6% to 2.4 bil­lion euro in 2014, ac­cord­ing to data from the coun­try's cen­tral bank. Of the to­tal, eq­uity stakes, in­clud­ing es­ti­mated net loss, amounted to 2.6 bil­lion euro and in­ter­com­pany lend­ing stood at 155 mil­lion euro.

Source: In­ter­na­tional Mon­e­tary Fund (IMF) World Eco­nomic Out­look Data­base – April 2015

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