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Romania: Economic and Political Outline
Economic Indicators | Foreign Trade in Figures | Sources of General Economic Information | Political Outline
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 7.2% in 2011. Romania has one of the lowest public debts in the EU (around 35% of the GDP) and inflation stabilized at 4.6% in 2011.
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 2009-2011. The country, which managed to reduce its public deficit to 4.4% of the GDP in 2011, hopes to be able to bring it under the 3% limit in 2012. It should again grow in 2012, with an estimated rate of 1.8%.
Romania maintains its objective of joinging the eurozone in 2015.
| Main Indicators | 2009 | 2010 | 2011 | 2012 (e) | 2013 (e) |
| GDP (billions USD) | 163.32 | 161.63e | 185.32e | 203.45 | 222.45 |
| GDP (Constant Prices, Annual % Change) | -7.1 | -1.3e | 1.5e | 3.5 | 3.8 |
| GDP per Capita (USD) | 7,610 | 7,542 | 8,666e | 9,534 | 10,446 |
| General Government Gross Debt (in % of GDP) | 23.9 | 31.7e | 34.4 | 34.4 | 34.0 |
| Inflation Rate (%) | 5.6 | 6.1 | 6.4 | 4.3 | 3.2 |
| Unemployment Rate (% of the Labor Force) | 6.3 | 7.6 | 5.0 | 4.8 | 4.6 |
| Current Account (billions USD) | -6.84 | -6.96 | -8.32 | -9.29 | -10.25 |
| Current Account (in % of GDP) | -4.2 | -4.3 | -4.5 | -4.6 | - |
Source: IMF - World Economic Outlook Database ; World Bank , Last Available Data
Note: (e) Estimated Data
Agriculture represents almost 7% 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 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 contributes to 37.3% of the country's GDP and employs almost a third of the active population. 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 55.7% of the GDP and employs 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) | 29.1 | 30.0 | 40.9 |
| Value Added (in % of GDP) | 7.1 | 26.2 | 66.7 |
| Value Added (Annual % Change) | 3.0 | 4.0 | 6.5 |
Source: World Bank - Last Available Data.
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| Monetary Indicators | 2006 | 2007 | 2008 | 2009 | 2010 |
| Romanian New Leu (RON) - Average Annual Exchange Rate For 1 USD | 2.81 | 2.44 | 2.52 | 3.05 | 3.18 |
Source: World Bank - Last Available Data.
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Distribution of Economic freedom in the world
Source: 2011 Index of Economic freedom, Heritage Foundation
Note: 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.
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Romanian exports have increased by almost 30% between 2006 and 2008. Imports have followed the same trend but with a volume of about two times higher (an increase of almost 60%). These results show that Romania remains too dependent on imports. The global economic crisis has accentuated the deficit in the balance of payments in 2009, which reached EUR 12 billion, meaning an increase of 15% in one year. In addition, Romania's main partners are also in economic difficulties themselves and the level of exports has decreased in a parallel way.
Romania's main export partners are Germany, Italy, France and Turkey. The country mainly exports industrial products. In both 2010 and 2011, the country's exports and imports increased, evidence of a global economic revival. Despite all, the deficit of the country's trade balance has not decreased and it should remain present in 2012.
Romania's main suppliers are Germany, 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 (27% and 34% respectively), while the part of imports of consumer goods has been smaller.
| Foreign Trade Indicators | 2007 | 2008 | 2009 | 2010 | 2011 |
| Imports of Goods (million USD) | 70,314 | 84,053 | 54,324 | 61,874 | 76,185 |
| Exports of Goods (million USD) | 40,488 | 49,535 | 40,567 | 49,343 | 62,653 |
| Imports of Services (million USD) | 8,754 | 11,731 | 10,097 | 9,365 | 10,778 |
| Exports of Services (million USD) | 9,388 | 12,802 | 9,768 | 8,741 | 10,326 |
| Imports of Goods and Services (Annual % Change) | 27.3 | 17.5 | -24.6 | 10.5 | - |
| Exports of Goods and Services (Annual % Change) | 7.8 | 19.4 | -11.8 | 10.5 | - |
| Imports of Goods and Services (in % of GDP) | 42.9 | 43.8 | 40.2 | 29.8 | - |
| Exports of Goods and Services (in % of GDP) | 30.7 | 31.0 | 33.3 | 23.5 | - |
| Trade Balance (million USD) | 24,566 | 28,182 | 9,606 | 7,805 | - |
| Trade Balance (Including Service) (million USD) | 24,036 | 27,231 | - | - | - |
| Foreign Trade (in % of GDP) | 73.6 | 74.8 | 73.6 | 53.2 | - |
Source: WTO - World Trade Organization ; World Bank , Last Available Data
| Main Customers (% of Exports) |
2010 |
| Germany | 18.1% |
| Italy | 13.8% |
| France | 8.3% |
| Turkey | 6.9% |
| Hungary | 4.8% |
| See More Countries | 48.1% |
| Main Suppliers (% of Imports) |
2010 |
| Germany | 16.7% |
| Italy | 11.6% |
| Hungary | 8.7% |
| France | 5.9% |
| China | 5.5% |
| See More Countries | 51.7% |
Source: Comtrade, Last Available Data
Source: Comtrade, Last Available Data
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Source: Worldwide Press Freedom Index 2011, Reporters Without Borders
Note: 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 is 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.).
Note: 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.
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Last Updates: May 2012