In Romania we focus on:
Sustainable infrastructure and regional development;
Productivity by helping private companies expand and improve workforce skills;
Financial intermediation and further development of capital markets.
As well as being a country where the EBRD works, Romania is also an EBRD donor. At the time of its accession to the European Union, Romania made available €18 million from state budget and EU’s pre-accession funds to support access to finance to local micro enterprises. More recently, Romania became a donor to the Eastern Europe Energy Efficiency and Environment Partnership Fund, contributing €100,000 for projects in Moldova.
The EBRD’s latest Romania strategy was adopted on 23 April 2020
Romania's policy response to the coronavirus crisis
The EBRD is monitoring Romania's policy response to the coronavirus pandemic. Our biweekly publication identifies the major channels of disruption as well as selected impact and response indicators.
Current EBRD forecast for Romania’s Real GDP Growth in 2020 -5.0%
Current EBRD forecast for Romania’s Real GDP Growth in 2021 3.0%
After robust growth of 4.1 per cent in 2019, Romania is experiencing a recession in 2020. Key transmission channels are lower consumption and a drop in exports. A domestic lockdown and state of emergency were introduced in mid-March 2020, lasting until mid-May and severely affecting travel, economic activity and consumer and business sentiment. The lockdown heavily affected private consumption: retail sales dropped by almost one fifth in April on a year-on-year basis, though some recovery has taken place in the following months.
Industrial production collapsed in April by almost 40 per cent year-on-year, causing exports of goods to drop. GDP fell by 3.9 per cent year-on-year in the first half of 2020, with private consumption falling by 5 per cent and exports by 15 per cent. The unemployment rate rose to 5.4 per cent in July 2020 (up from 3.7 per cent in January 2020), with further job losses likely in the coming months as government support schemes are phased out. Inflation picked up to 2.2 per cent year-on-year in June, which is within the central bank’s target of 2.5 per cent +/- 1 percentage point.
Romania entered the Covid-19 crisis with a significant fiscal deficit (4.3 per cent of GDP in 2019). The combination of a shrinking output and government revenues, a fiscal stimulus programme amounting to around 4-5 per cent of GDP, and another increase in pensions in September 2020 (on top of one in 2019), is expected to raise the fiscal deficit in 2020 to an estimated 8.6 per cent of GDP, as per the August 2020 revised budget. The National Bank of Romania reduced the policy rate three times, by a total of 1 percentage point, to 1.5 per cent, and narrowed the related interest rates corridor to ±0.5 percentage points from ±1.0 percentage points, thus lowering further the lending facility rate. GDP is expected to drop by 5.0 per cent in 2020 and rebound by 3.0 per cent in 2021. The recovery is contingent on a gradual normalisation of economic activity in both Romania and its main economic partners, and a resumption of structural reforms. However, this would be hard to achieve should social distancing remain in place for longer than anticipated.
Romania in the EBRD’s 2020-21 Transition Report