Economic trends
Since the early 1990s, successive governments have gradually promoted a liberal economic policy to privatize the state owned companies. In 2006, almost 30% of Romania's GDP was still generated by public 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. Inflation has declined from more than 150% in 1997 to about 5% today. However, the Romania National Bank had to reinforce its monetary policy due to constant depreciation of its national currency. The unemployment rate was very low before the financial crisis but it has increased since 2008 and it is about 7% now. Romania has one of the lowest public debts in the EU (around 35% of the GDP).
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, a trend that continued in 2010. The country, which managed to bring its deficit to 4.4% of the GDP in 2011, hopes to fall below 3% in 2012. Romania maintains its objective to integrate the euro area in 2015.
Main branches of industry
Agriculture represents almost 7% of Romania's GDP and employs one fourth 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 about one third of the country's GDP and employs almost 25% 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 almost 60% of the GDP and employs about half of the nation's workforce. Tourism, in particular, is booming.
International trade
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 has 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 commercial partners are Germany, Italy, France and Turkey. In 2010, the country's exports and imports have increased, giving the signs of a global revival. Despite all, the deficit of the country's trade balance has not decreased and it should remain present in 2011.
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Last updates: February 2012
