Romania`s Economic Report 2013
Following the financial crisis of 2008, Romania has made significant progress in terms of reducing macroeconomic and microeconomic imbalances. However, Romania remains vulnerable to Euro zone uncertainty, volatility of capital flows in emerging markets and investors perception of regional and global conjuncture.
From 2010 to date, Romania has reduced macroeconomic imbalances to relatively sustainable under two agreements with the IMF supported by World Bank and European Union. The GDP returns to previous levels of economic and financial crisis, domestic consumption and export benefits of increases. This slight increase in or exit of the depression phase, remains fragile to economic fluctuations of the European Union.
The main problems identified by the IMF include low competitiveness, corruption, restricted policies of supporting the business, foreign investments, taxation and rigid bureaucracy.
Gross Domestic Product(GDP) of Romania
Domestic products (GDP ) of Romania in 2012 was 131 billion Euro and in the second quarter of 2013 recorded a GDP of 35 billion euros, an increase by 1.4% compared to the corresponding quarter of 2012 and by 0.5 % compared to the first quarter of 2013. GDP per capita reached 6 139 Euro for 2012, being estimated an increase of 1.3 % for 2013 and 1.6 % in 2014. Romania ‘s budget deficit changed from -3.9 % of GDP in 2012 to +1.1 % of GDP in 2013.
Share of sectors in GDP and public debt of Romania:
Agriculture12% of GDP is due to contributions from agriculture
Industry38% of GDP is due to contributions from industry.
Services50% of GDP is due to contributions from services.
In 2008, the public debt of Romania was 14% of PIB
In 2010, the public debt of Romania was 32% of PIB
In 2013, the public debt of Romania was 38% of PIB
Compared with other European Union member states, Romania recorded at the end of 2013 one of the biggest growth, registering the third quarter of 2013 even the most vigorous growth of European countries of 1.6%, followed by Latvia with 1.2%. In Germany, the economic growth slowed to 0.3%, in France, it shrank to 0.1% – in similar situation being Italy as well. In the UK, there is a slight growth of 0.8%.
Unemployment in Romania
The unemployment rate for October 2013 stood at 5.4% with a total of approximately 489 000 people registered without a job. Of the registered unemployed, 173 000 people are compensated, while 316 000 are not compensated. Regarding the residence, 187 000 unemployed people are from rural areas, while 302 000 unemployed people are from urban areas.
Unemployment structure by age in Romania in October 2013:
The highest unemployment rates are recorded in Mehedinti (10.10%), Teleorman(10.05%), Galati (9.05%) and Dolj (9.03%) and the lowest level of unemployment is registered in Ilfov (1.77%) , Timis (1.88%), Bucharest (2.06%) and Arad (3.19%).
Unemployment rate is expected to maintain a level of about 5.4% in Romania for 2014 as a result of maintaining a constant demand on the labor market.
Inflation in Romania
Inflation rate at the end of 2013 stands at 1.8% as expected by the central bank target of 2.5%, the threshold at which it wants to recover from 2014. This drop in inflation was mainly due to abundant agricultural crop and reducing VAT in some bakery products.
2008 - Q46.7% was the inflation rate in Romania in 2008 Q4
2010 - Q48.1% was the inflation rate in Romania in 2010 Q4
2013 - Q41.8% was the inflation rate in Romania in Q4
The dynamics of fuel prices was negative, the effect of the quotation of RON against USD influenced the international oil prices fluctuations. Also, unit labor costs were lower compared with the previous period. BNR expected inflation of 3% for the end of 2014.
Romania ‘s credit rating , recommended in November 2013 by Standard & Poors was BB + for long-term financing and B for short-term debts with a stable outlook.
Rating agency Fitch Ratings evaluated Romania in September 2013 for the long-term foreign currency debt to BBB- and BBB for local currency with a stable outlook.
Moody `s recommended rank Baa3 for Romania, warning on the vulnerability of Romania to changes in the European Union.
HDI Report and World Happiness Report in 2013
In UNHDI report (United Nations Human Development Index) from 2012 to 2013, Romania ranked 56/186 in terms of human development, considered in the next category category “very high human development ” , namely ” high human development “. HDI (Human Development Index) takes into account aspects untouched by other indicators of well-being of nations, such as GDP. HDI examines life expectancy, education and income to classify countries in terms of human development.
In the report of 2013 World Happiness Report, which examines the degree of happiness, life expectancy, well-being and human development, Romania ranks 90/156, -0.186 % down from the previous period.
EU funds absorption in 2013:
25% is the degree of EU funds absorption in Romania, in 2013.
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