Romania
Highlights and Key Issues Romania’s industrial sector continued to
The main driver of growth remains exports,
recover steadily in the final months of 2010 and is expected to keep strengthening this year. In particular, production expectations rose to their highest level in more than two years in January, while rising capacity utilisation could finally break the downward trend in investment, at least in the industrial sector. Although unemployment has declined over
the last year, the trend is partly explained by a shrinking labour force. Consumer confidence remains low and spending continues to weaken as a result of the fiscal squeeze (including pay cuts and lower welfare expenditure).
which in December were up over 30% on the year in euro terms. But this leaves Romania vulnerable if EU demand were to weaken. Despite slowing to 7% in January, CPI
inflation is being kept high by rising oil and food prices and the impact of the VAT hike in July. But with no sign of second-round inflation effects, the central bank kept its key rate at 6.25% in February. Although GDP growth is likely to be positive
for 2011 as a whole, albeit only marginally so, continued strong fiscal consolidation will remain fundamental for lasting recovery. We expect the budget deficit to shrink to 4.7% of GDP in 2011 from 6.6% in 2010.
Forecast for Romania (Annual percentage changes unless specified) Domestic Demand Private Consumption Fixed Investment Stockbuilding (% of GDP) Government Consumption Exports of Goods and Services Imports of Goods and Services GDP Industrial Production Consumer Prices Current Balance (% of GDP) Government Budget (% of GDP) Short-Term Interest Rates (%) Long-Term Interest Rates (%) Exchange Rate (LC per US$) Exchange Rate (LC per Euro)
2008
2009
2010
2011
2012
2013
6.4 8.7 18.3 3.1 6.6 7.1 5.5 7.4 2.4 7.9 -11.6 -4.8 9.5 7.7 2.52 3.68
-15.7 -9.4 -22.3 -3.0 1.3 -4.9 -20.2 -6.9 -6.0 5.6 -4.2 -7.4 9.3 9.7 3.05 4.24
-1.5 -1.8 -14.7 1.3 -2.7 17.3 11.1 -2.1 4.1 6.1 -4.3 -6.6 6.7 7.3 3.18 4.21
-2.3 -0.4 -4.9 0.1 -1.2 7.0 1.0 0.1 5.2 5.1 -2.3 -4.7 5.9 7.2 3.25 4.36
4.0 4.7 4.9 -0.5 1.6 7.0 5.2 4.8 5.4 3.2 -2.6 -4.0 4.8 6.9 3.47 4.45
6.6 6.2 8.5 -0.2 3.2 6.5 7.4 5.9 6.5 3.2 -3.3 -3.8 4.5 7.0 3.59 4.50
For further information contact Fabio Ortolani (fortolani@oxfordeconomics.com)
Country Economic Forecast: 15 February 2011
Romania
Overview Industrial output rises strongly...
The industrial sector strengthened at the end of 2010, with output rising 2.5% on the quarter in Q4 despite a slight correction in December. Overall, production rose 4.4% year-on-year in Q4 and was only 1.2% below its 2008Q1 peak. Moreover, industrial orders were up almost 25% on the year in November, a sign that activity is likely to remain buoyant in the next few months. Capacity utilisation rose to 78.9% in 2011Q1, 10% points above its level in 2009Q4 and close to its precrisis average. The ongoing increase in exports will continue to support production and reduce excess capacity, providing a stimulus to investment, whose downward trend is forecast to end in the coming months. The Eurostat industrial confidence indicator improved for the sixth consecutive month in January, reaching its highest since October 2008.
Romania: Real GDP and industrial production % year 20
Forecast
15
GDP
10 5 0 -5
Industrial production
-10 -15 -20
-25 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 Source: Oxford Economics / World Bank
Romania: Unemployment rate % (unadjusted rate) 16 14
Forecast
12
…and jobless rate falls below 7%…
Confidence indicators for the industrial sector point to higher employment expectations, which were close to their pre-crisis average in January. Indeed, the registered unemployment rate fell to 6.9% in December, almost 1% point below its level of a year earlier. However, outside of industry, the lower jobless rate was not reflected by an increase in the number of employed – which had barely ended a twoyear decline in November according to seasonally adjusted measures – as the economy remains very weak and the workforce is shrinking as people leave the labour market as unemployment benefits expire.
…but consumption weakens further…
Consumer spending has continued to weaken. In particular, retail sales plunged in 2010Q4, falling by more than 4% for the second consecutive quarter. Overall, sales in 2010Q4 were 22% down on their 2008Q2 peak. Austerity measures – including a 5% hike in VAT last July and public sector pay cuts – have aggravated the impact of the crisis on consumer spending. As further measures will be implemented during this year, households continue to expect a deterioration in their financial situation in 2011. However, consumer confidence has brightened somewhat in the last few
Country Economic Forecast: 15 February 2011
10 8 6 4 2 0 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 Source: Oxford Economics
Romania: Private consumption and total fixed investment
% year 40
Forecast
30 20
Consumption, private
10 0 -10 -20
Total fixed investment
-30 -40 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 Source: Oxford Economics / World Bank
Romania
months, albeit from dismally low levels, as the recovery in the industrial sector has dampened unemployment fears and improved the outlook for the rest of the economy. Overall, we expect consumption will fall for the third consecutive year in 2011, by 0.5%, before recovering quite strongly in 2012-13.
Romania: Current account balance US$ bn
% of GDP
0
0 -3
-6
-6
…and downside risks remain
Exports continued to outpace imports at the end of 2010, growing by 32.2% year-on-year in euro terms in Q4 compared to 21.5% growth in imports. We expect the contribution of net exports to remain positive over the next few quarters, with helpful spillover effects for the rest of the economy. But a slowdown in exports caused by weaker external demand would weigh heavily on Romania’s recovery, as domestic demand remains extremely feeble. Moreover, if the debt crisis in the Eurozone were to worsen, bond spreads could rise and thus make refinancing more difficult, prompting the government to implement further consolidation measures.
-12 % of GDP (RHS)
-9
-18 -12 -24
US$ bn (LHS)
-30 -18 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 Source: Oxford Economics
Romania: Inflation and earnings % year 60 50
Central bank leaves rate at 6.25%…
CPI inflation fell to 7% in January from 8% in December despite the impact of rising oil and food prices. Inflation is expected remain well above the central bank’s target of 3% (+/- 1%) for the next few months because of last July’s 5% point hike in VAT, but should fall towards the target during H2. Meanwhile, the central bank left its key policy rate unchanged at 6.25% in early February and we expect it to start easing its policy rate once inflation is closer to the target. However, inflation could prove stickier if energy and food prices remain high or a deterioration in the budget deficit forces the government to reduce subsidies on administered prices.
…while deficit is set to shrink
Continuing efforts on the fiscal side are helping the government to meet the targets agreed under the US$20bn IMF bailout that ends in May 2011. In particular, the budget deficit is expected to shrink from 6.6% of GDP in 2010 to 4.7% in 2011. Meanwhile, the IMF and European Commission have recently approved a two-year precautionary deal that makes €5bn available to Romania if needed. The plan gives the government additional liquidity, reducing the pressure on its borrowing needs.
Country Economic Forecast: 15 February 2011
-15 F'cast
Forecast
40 30
Earnings
20 10
Inflation
0 -10 1999
2001
2003
2005
2007
2009
2011
2013
Source: Oxford Economics
Romania: Government budget balance US$ bn 0
% of GDP 0
-2
-1
-4
-2
-6
-3
US$ bn (LHS)
-8 -10
-4 % of GDP (RHS)
-5
-12
-6
-14
F'cast
-7
-16 -8 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 Source: Oxford Economics
Romania
Key Indicators: Romania Percentage changes on a year earlier unless otherwise stated
J an Feb Mar Apr Ma y Jun Jul Aug Sep Oct Nov Dec 2011 J an
Industrial production sa, excl. con 5.8 2.3 6.1 2.8 4.7 4.6 2.1 4.8 2.9 2.6 4.0 6.6
CPI
PPI
3.3 2.9 4.5 5.6 6.5 6.2 7.0 6.7 7.9 7.8 8.1 9.6
Unemployment rate % 8.1 8.4 8.4 8.1 7.7 7.5 7.5 7.4 7.4 7.1 7.0 6.9
Consumer confidence % balance -47.7 -48.8 -46.8 -47.1 -55.6 -63.3 -62.1 -58.8 -57.8 -56.7 -54.5 -55.4
Indus trial confidence % balance -9.8 -1 0.2 -9.3 -1 0.1 -9.9 -8.7 -9.3 -9.2 -7.7 -5.7 -5.4 -4.5
Ex ports goods % year 20.5 23.1 17.0 34.4 30.3 31.4 20.9 26.1 35.1 27.8 30.5 39.3
Imports goods % year 6.5 9.4 21.6 23.3 29.6 29.8 20.4 15.7 15.4 15.2 25.1 24.2
5.2 4.5 4.2 4.3 4.4 4.4 7.1 7.6 7.8 7.9 7.7 8.0
-
7.0
-
-
-48.7
-2.8
-
-
Financial Indicators: Romania
Jan Feb Ma r Apr May Jun Jul Aug Sep Oct Nov Dec 2011 Jan
Policy rate % 7.50 7.00 6.50 6.50 6.25 6.25 6.25 6.25 6.25 6.25 6.25 6.25
3-month BUBOR % 9.2 0 7.1 8 6.3 4 5.3 0 6.6 5 6.8 2 7.1 6 6.7 0 6.7 3 6.7 0 6.6 1 6.2 7
6.25
5.2 9
Money Bucharest supply (M2) Stock Exch. % yea r BET-C Index 4 .8 2951 5 .6 2994 7 .4 3316 7 .1 3565 7 .6 3074 7 .1 2925 5 .8 2877 5 .4 3032 5 .5 3005 5 .0 3087 5 .5 3032 6 .2 3052 -
3327
Country Economic Forecast: 15 February 2011
Real effective exchange rate 2000=10 0 105.9 105.2 105.2 103.3 101.0 99.2 102.3 102.6 102.1 103.1 102.6 102.3
Exchange rate RON/US$ 2.900 3.007 3.011 3.076 3.321 3.470 3.339 3.285 3.264 3.079 3.140 3.244
-
3.192
Exchange Total reserves rate minus gold RON/Euro Mil.Euros 4.141 28037 4.118 29739 4.088 32037 4.129 32386 4.174 31989 4.240 31627 4.261 31580 4.239 31554 4.264 32579 4.280 32309 4.293 32800 4.293 32432 4.262
32689
Romania R OMA NIA
CONSUMERS EXPENDITURE (C) YEARS BEGINNING Q1 8 .70 2008 -9 .44 2009 -1 .81 2010 -0 .45 2011 4 .72 2012 6 .17 2013 6 .37 2014 2008 I II III IV 2009 I II III IV 2010 I II III IV 2011 I II III IV 2012 I II III IV 2013 I II III IV 2014 I II III IV
TA B LE 1 SU MM AR Y ITE MS Ann ua l P erc en tag e C ha ng e s, U n le ss Othe rw is e Sp e cifi ed
TOTAL FINAL EXPENDITURE (C+IF+GC+X)
TOTAL FIXED INVESTMENT (IF)
REAL GDP
INDUSTRIAL PRODUCTION
CONSUMER PRICES
(IP)
UNEMPLOYMENT RATE (%) (UP)
(GDP)
(CPI)
9.8 3 -1 0.1 2 1.0 3 1.1 5 5.2 9 6.4 2 6.4 1
1 8.3 2 -2 2.3 2 -1 4.7 5 - 4.8 9 4.9 0 8.5 2 8.6 0
7.4 1 -6.9 5 -2.1 4 0.0 6 4.7 7 5.8 9 5.7 8
2 .40 -6 .02 4 .09 5 .23 5 .36 6 .53 5 .98
4 .03 6 .58 7 .55 7 .17 6 .99 6 .50 6 .00
7 .85 5 .59 6 .11 5 .03 3 .15 3 .24 3 .21
14 .45 12 .65 10 .29 -1 .73
1 5.9 3 1 4.8 9 1 2.0 9 -2.1 6
2 8.2 5 2 3.3 9 1 6.5 3 7.5 9
9.3 2 9.6 5 8.2 9 2.6 0
7 .30 5 .63 3 .31 -6 .34
4 .10 3 .70 3 .90 4 .40
7 .95 8 .56 8 .11 6 .80
-9 .36 - 11 .97 - 11 .19 -4 .98
-6.0 7 -1 4.3 5 -1 2.3 1 -7.6 0
3.5 7 -3 1.6 5 -2 9.4 3 -3 0.9 0
-5.2 3 -8.0 2 -7.5 8 -6.9 4
- 13 .20 -7 .89 -5 .26 3 .15
5 .60 6 .00 6 .90 7 .80
6 .77 6 .08 4 .98 4 .57
-2 .73 0 .31 -1 .18 -3 .59
-3.7 6 4.9 8 2.1 3 1.1 6
-3 0.0 0 - 1.1 6 -1 0.9 9 - 9.8 7
-3.2 3 -1.4 8 -2.2 1 -1.6 2
4 .70 4 .05 3 .24 4 .38
8 .40 7 .50 7 .40 6 .90
4 .63 4 .37 7 .52 7 .88
-1 .81 -2 .18 -0 .13 2 .39
-0.7 0 -0.1 0 1.8 5 3.5 7
-1 1.3 9 - 7.2 2 - 1.2 2 1.1 9
-1.5 4 -1.1 4 0.4 4 2.5 2
8 .00 4 .84 4 .80 3 .43
7 .13 7 .17 7 .19 7 .17
6 .56 6 .44 4 .01 3 .25
3 .57 4 .52 5 .15 5 .61
4.4 3 5.1 0 5.5 8 6.0 1
2.9 2 4.3 6 5.5 1 6.8 0
3.9 4 4.5 5 5.1 1 5.4 8
4 .06 4 .99 5 .94 6 .43
7 .13 7 .04 6 .95 6 .85
2 .97 3 .17 3 .23 3 .24
5 .85 6 .10 6 .28 6 .42
6.2 3 6.4 1 6.5 0 6.5 1
7.8 2 8.5 0 8.8 7 8.8 4
5.7 6 5.9 2 5.9 3 5.9 4
6 .54 6 .56 6 .57 6 .46
6 .71 6 .56 6 .42 6 .30
3 .24 3 .24 3 .24 3 .24
6 .41 6 .37 6 .36 6 .35
6.4 7 6.4 1 6.3 9 6.3 8
8.7 5 8.6 6 8.5 4 8.4 6
5.8 7 5.8 1 5.7 5 5.6 8
6 .29 6 .07 5 .85 5 .74
6 .18 6 .06 5 .94 5 .81
3 .24 3 .23 3 .21 3 .18
SHORT-TERM INTEREST RATE
SPREAD OVER US SHORT-TERM RATE (RSH RSH US)
COPYRIGHT (C) , OXFORD ECONOMICS
R OMA N IA
TAB LE 2 S UM MA RY ITEM S
TRADE BALANCE ($ BN)
CURRENT ACCOUNT ($ BN)
CURRENT ACCOUNT (% OF GDP)
(BVI$/ 1000)
(BCU$/ 1000)
(BCU$*1 00 /GDP$!)
YEARS BEGINNING Q1 -2 8.2 2008 -9.6 2009 -7.8 2010 -5.2 2011 -6.8 2012 -9.1 2013 -1 1.2 2014
-24 .0 -6 .9 -6 .8 -3 .8 -4 .2 -5 .8 -7 .3
- 11 .8 -4 .3 -4 .3 -2 .3 -2 .6 -3 .3 -3 .9
GOVERNMENT FINANCIAL BALANCE (LEI BN) (GB)
-24 .7 -36 .4 -33 .3 -25 .0 -22 .7 -23 .6 -24 .4
2008 -6.2 -5 .0 - 10 .2 0 .1 I -8.0 -8 .8 - 16 .3 -5 .3 II -8.0 -6 .1 - 11 .0 -2 .0 III -5.9 -4 .1 -9 .1 -17 .5 IV 2009 -2.0 -0 .5 -1 .4 -7 .9 I -2.4 -2 .5 -6 .3 -6 .5 II -2.4 -1 .4 -3 .3 -11 .2 III -2.8 -2 .5 -6 .0 -10 .8 IV 2010 -1.8 -2 .3 -5 .5 -8 .2 I -2.4 -2 .9 -7 .6 -9 .9 II -1.6 -0 .8 -2 .1 -5 .3 III -2.0 -0 .8 -2 .0 -10 .0 IV 2011 -1.4 -1 .1 -2 .6 -6 .3 I -1.2 -0 .9 -2 .2 -6 .3 II -1.2 -0 .9 -2 .1 -6 .2 III -1.3 -1 .0 -2 .4 -6 .1 IV 2012 -1.5 -1 .0 -2 .4 -5 .6 I -1.7 -1 .0 -2 .5 -5 .7 II -1.8 -1 .1 -2 .6 -5 .7 III -1.9 -1 .2 -2 .8 -5 .8 IV 2013 -2.0 -1 .3 -3 .1 -5 .8 I -2.2 -1 .4 -3 .3 -5 .9 II -2.3 -1 .5 -3 .4 -5 .9 III -2.5 -1 .6 -3 .6 -6 .0 IV 2014 -2.6 -1 .7 -3 .7 -6 .0 I -2.7 -1 .8 -3 .8 -6 .1 II -2.9 -1 .9 -4 .0 -6 .1 III -3.0 -2 .0 -4 .1 -6 .2 IV Note 1 : REAL INTEREST RATE = Nominal interest rate (RSH) - % change in CPI
GOVERNMENT FINANCIAL BALANCE (% OF GDP) (GB*100 /GDP!)
(RSH)
REAL SHORT-TERM INTEREST RATE (Note 1)
EXCHANGE RATE PER EURO (RXEU)
EXCHANGE RATE PER US DOLLAR (RXD)
-4.8 -7.4 -6.6 -4.7 -4.0 -3.8 -3.6
9 .5 9 .3 6 .7 5 .9 4 .8 4 .5 4 .3
6.6 8.6 6.3 5.5 3.5 1.1 -0.2
1 .6 3 .7 0 .6 0 .8 1 .6 1 .2 1 .1
3 .69 4 .24 4 .21 4 .36 4 .45 4 .50 4 .50
2.5 2 3.0 5 3.1 8 3.2 5 3.4 7 3.5 9 3.6 2
0.1 -4.2 -1.5 -1 3.4
8 .2 9 .4 1 0 .0 1 0 .3
4.9 6.7 7.1 7.5
0 .2 0 .9 1 .9 3 .4
3 .69 3 .65 3 .59 3 .81
2.4 6 2.3 4 2.3 8 2.8 9
-6.4 -5.3 -9.2 -8.9
1 0 .2 9 .9 9 .0 8 .2
9.0 9.1 8.6 7.9
3 .4 3 .9 4 .0 3 .6
4 .27 4 .20 4 .23 4 .27
3.2 8 3.0 8 2.9 5 2.8 9
-6.6 -7.9 -4.2 -7.9
7 .6 6 .6 6 .3 6 .3
7.3 6.1 5.9 6.0
2 .9 2 .2 -1 .3 -1 .6
4 .11 4 .18 4 .26 4 .29
2.9 7 3.2 9 3.3 0 3.1 5
-4.9 -4.9 -4.7 -4.5
6 .3 6 .1 5 .6 5 .4
6.0 5.8 5.3 5.0
-0 .2 -0 .3 1 .6 2 .1
4 .31 4 .34 4 .37 4 .40
3.1 6 3.2 1 3.2 8 3.3 6
-4.1 -4.0 -3.9 -3.9
5 .1 4 .9 4 .6 4 .6
4.7 3.8 3.1 2.5
2 .1 1 .7 1 .4 1 .3
4 .42 4 .44 4 .46 4 .48
3.4 1 3.4 5 3.4 9 3.5 3
-3.9 -3.8 -3.8 -3.7
4 .5 4 .5 4 .4 4 .4
1.9 1.3 0.8 0.4
1 .3 1 .2 1 .2 1 .1
4 .50 4 .50 4 .50 4 .50
3.5 7 3.5 9 3.5 9 3.6 1
-3.7 -3.6 -3.6 -3.5
4 .3 4 .3 4 .2 4 .2
0.1 -0.2 -0.3 -0.4
1 .1 1 .1 1 .0 1 .0
4 .50 4 .50 4 .50 4 .50
3.6 1 3.6 2 3.6 3 3.6 3
COPYRIGHT (C) , OXFORD ECONOMICS
Country Economic Forecast: 15 February 2011
Romania Background
Romania and Bulgaria were the last countries to join the EU, on 1 January 2007. Relative poverty and concerns about corruption, crime and the ability to use EU funds effectively mean that ever since accession there has been strict monitoring by the EU authorities – with the threat of sanctions to withhold funds if progress is not sustained. Nonetheless, EU accession marked an end of the era that started with the fall of Nicolae Ceausescu in 1989. The long rule of Ceausescu from 1965 to 1989 was associated with austerity and severe political repression, but the violent change in December 1989 marked the end of the communist regime in Romania. However, former communist party officials dominated the government until 1996 and for the four years after 2000. A new constitution was adopted in 1991 and revised in 2003, bringing Romanian law into line with EU legislation.
Even so, concerns about judicial effectiveness in tackling corruption and the stability – and cleanliness – of the political system remain. Political consensus is difficult to establish and reforms – particularly to the public sector and on issues such as pensions – are still to be implemented. However, the Communist legacy should not be underestimated. In 1989, Romania had a dilapidated infrastructure, stifling red tape and endemic corruption, while reform in the 1990s proceeded at a gradual pace. In the early post-Communist years, failure to undertake farreaching structural change resulted in periods of high inflation and macroeconomic imbalance. However, measures taken from 2000 onwards helped to stabilise the economy and subsequent growth (until the global recession hit in 2009) was strong, although fiscal consolidation, restructuring and privatisation are still needed. In addition, some progress has been made in fighting corruption in recent years, with a considerable number of highlevel corruption cases launched.
Nonetheless, recent events have illustrated the continued fragility of Romanian politics. In the parliamentary elections at end-November 2008, Romanians voted for change, with the Democratic Liberal Party (PD-L) and the Social Democratic Party (PSD) emerging as the largest parties in parliament with around a third of the vote each (albeit from a very low voter turnout of 39%). The previously ruling National Liberal Party (NLP) polled only 19%. The PD-L and PSD formed a centre-left coalition government under Prime Minister Emil Boc (PD-L), the former mayor of the town of Cluj, and this coalition promised more effective government decision-making given the large combined share of parliamentary seats. Nevertheless, the two parties did not have a strong track record of collaboration and the coalition collapsed in under a year, in October 2009, in the run-up to the presidential elections at the end of that year. In a surprising turn of events, President Basescu (an ally of Boc) narrowly won the presidential run-off with 50.3% of the vote against Social Democrat leader Mircea Geoana’s 49.7% (who had been ahead of the incumbent in most polls). Once the result had been confirmed, the president nominated and parliament once again approved Emil Boc – who had been caretaker since the fall of his coalition in October – as prime minister. However, the Liberal-Democrat leader’s majority relies on the support of ethnic minority and independent parliamentarians, given the continued opposition from the Social Democrats (now under new leader Victor Ponta) and the National Liberal Party.
Prime Minister Emil Boc’s government is intent upon meeting its commitments under the ongoing US$20bn IMFled programme, which included the passage of a fiscal responsibility law by the end of March 2010 and a pension reform bill by the end of June (a deadline finally met in September). Although the government achieved its 2009 general government borrowing target (of 7.3% of GDP), the original deficit target for 2010 of 5.9% of GDP was raised to 6.8% given the continuation of the recession. More progress is expected in 2011 when activity finally revives, but the country is unlikely to get its deficit close to 3% of GDP until after 2015. As a result, Eurozone entry is now probably at least five years away. Moreover, opposition to public sector job cuts is vocal and likely to be reinvigorated by last year’s events (no-confidence votes, the Constitutional Court ruling on pension reforms etc).
The central bank targets end-year inflation within a 2% point range, although policymakers also watch exchange rate developments closely (which resulted, for example, in interest rate rises in early 2009 as the currency came under pressure) due to a high proportion of household and corporate borrowing in foreign currency. The end-2009 inflation rate of 4.7% was just outside the 2.5-4.5% target but a 5% VAT hike in July 2010 made the (unchanged) target range unachievable. For 2011, the range has been lowered to 2-4% as the central bank attempts to achieve convergence with the Eurozone, in order to prepare for eventual membership of the Euro area.
Country Economic Forecast: 15 February 2011
Romania Key Facts Politics Head of state: President Traian BASESCU Head of government: Prime Minister Emil BOC Political system: Republic Date of next presidential election: November 2014 Date of next legislative election: November 2012 Currency: Leu (RON); 'old' Leu (ROL) phased out in 2006
Long-term economic & social development 1975 1985 GDP per capita (US$) Inflation (%) Population (mn) 21.2 22.7 Urban population (% of total) 42.8 49.6 Life expectancy (years) 69.6 69.7 Source : Oxford Economics & World Bank
Structure of GDP by output Agriculture Industry Services Source : World Bank
1995 1564 33.3 22.7 54.0 69.5
2008* 9465 7.9 21.5 54.2 72.6
* 2008 or latest available year
2008 8.0% 34.0% 58.0%
Source : CIA Factbook Location: Southeastern Europe, bordering the Black Sea, between Bulgaria and Ukraine (CIA Factbook)
Long-term sovereign credit ratings & outlook Fitch Moody's S&P
Foreign currency BB+ (Stable) Baa3 (Stable) BB+ (Stable)
Corruption perceptions index 2010
Local currency BBB- (Stable) Baa3 (Stable) BBB- (Stable)
Score 7.65 3.46 3.70 4.05
Developed economies (average) Emerging economies (average) Romania Emerging Europe Source: Transparency International
Structural economic indicators
Scoring system 10 = highly clean, 0 = highly corrupt
1990 -18
1995 -1779 -1924 417
2000 -1105 -1360 1048
2008* -24033 -28181 13752
Debt service (US$ million) Debt service (% of exports) External debt (% of GDP)
18 0.3 3.0
997 10.5 19.3
2500 20.1 30.1
18537 30.2 48.1
Oil production (000 bpd) Oil consumption (000 bpd)
382
135 244
120 224
95 221
Current account (US$ million) Trade balance (US$ million) FDI (US$ million)
Composition of goods & services exports, 2009 Other goods exports 0.3%
Transportation 5.7%
Other commercial services 11.1%
Source : Oxford Economics / World Bank / EIA
Destination of goods' exports (2009) European Union (27) Turkey Russian Federation Serbia Norway Source : WTO
Manufactures 64.9%
74.5% 4.9% 1.8% 1.4% 1.4%
Country Economic Forecast: 15 February 2011
Travel 2.4%
Fuels and mining products 7.7%
Source : WTO
Agricultural products 7.8%