Romania overview

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In Romania we focus on:

Promoting stability and expanding products in the financial sector. Given the continuing global economic and financial uncertainty, the stability of the financial sector is still at risk. Further development is also required in the areas of leasing and insurance and local capital markets.

Strengthening infrastructure through improved efficiency and greater private sector involvement. It is necessary to develop the national infrastructure sector, especially roads, and, where appropriate, to introduce private sector investment via concessions /PPPs and the privatisation of transport operators. In many infrastructure operations (water, waste, roads, rail, district heating, etc.) there is a need for improved operating efficiency and service levels, and less dependence on public subsidies and state financing.

Restructuring the power sector and increasing energy efficiency and sustainability. A large part of Romania’s energy sector is still state-owned and needs to be restructured and/or privatised to encourage investment and to promote efficiency. Despite improvements in recent years, Romania is still an energy-intensive economy and needs to make further progress in the transition to an efficient, low carbon economy.

The EBRD’s latest Romania strategy was adopted on 28 February 2012

Current EBRD forecast for Romania’s Real GDP Growth in 2015 3.0%

Current EBRD forecast for Romania’s Real GDP Growth in 2016 3.2%

Romania’s economy grew by 2.8 per cent in 2014, on the back of strong private consumption, boosted by a rise in minimum wage in mid-2014, while contribution of net exports remained low and investments subdued. Recent and prospective interest rate cuts, enabled by inflation falling on the back of energy and food prices, will continue to boost domestic demand in 2015 and 2016. Rising industrial confidence and the deprivation of inventories may lead to a rise in investments after two years of fall. A recent reduction in NPLs following proactive provisioning policies by the central bank – a first in the region - should help the credit supply. Government expenditure is expected to rise in order to absorb more EU funds, as absorption rate still remains the lowest in EU. Overall, these should enable domestic demand to edge up. Somewhat stronger growth in eurozone, albeit still moderate, may push up Romania’s net exports in the near term, keeping growth at around 3.0 per cent in 2015 and 3.2 per cent in 2016, among the highest in emerging Europe. Meanwhile, annual average inflation is expected to remain at an average of 0.5 per cent in 2015, on the back of June cuts in VAT on food products, as well as low inflation expectations and lower commodity prices.

Romania in the EBRD’s 2014 Transition Report

Romania in the latest BEEPS survey

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