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.
As well as being a country where the EBRD works, Romania is also an EBRD donor. In 2015 Romania became a donor to the Eastern Europe Energy Efficiency and Environment Partnership Fund, contributing €40,000 for projects in Moldova.
The EBRD’s latest Romania strategy was adopted on 30 September 2015
Current EBRD forecast for Romania’s Real GDP Growth in 2016 4.0%
Current EBRD forecast for Romania’s Real GDP Growth in 2017 3.5%
The Romanian economy grew by 3.8 per cent in 2015, supported by domestic demand. While private consumption was the major driver of growth, in a low-inflation environment and helped by a rise in income, investments grew on the back of the lower cost of funding, due to improved investor confidence and historically low lending rates. In 2016 and 2017, strong domestic demand will continue to support growth. Consumption will be pushed up by a cut in the VAT rate to 20 per cent from 24 per cent as of January 2016, a 19 per cent hike in the minimum wage as of May 2016, planned wage hikes in the public sector, improved economic sentiment and a low inflation environment. Private investments will continue to grow on the back of the lower cost of funding and an abolition of the construction tax as of 2017. However, growth is expected to come in at a slower pace amidst uncertainty around 2016 elections. Although public investment might decline due to the end of the previous EU-funding period, public consumption will likely rise on the back of wage rises in the public sector, thus putting some pressure on the fiscal balance. Overall, growth is expected at 4.0 per cent in 2016 and 3.5 per cent in 2017.