Romania overview

Cityscape

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 2018 4.6%

Current EBRD forecast for Romania’s Real GDP Growth in 2019 4.2%

Romania was one of the best performing economies in the EU in 2017, with GDP growth of 6.9 per cent. Private consumption was the main driver of growth, supported by a pro-cyclical fiscal policy, strong wage growth and low unemployment. Investment started to pick up in the second half of the year, driven by increased absorption of EU funds. Overheating risks are becoming apparent, however, notably in the tightening of the labour market and the
increase in inflation to 5 per cent in March 2018. The central bank has started to tighten monetary policy, raising its main policy rate twice so far in 2018, with further rate increases expected this year. External vulnerabilities are rising, with the current account deficit widening to 3.4 per cent of GDP in 2017 due to rising imports, while the government’s policies are having an adverse impact on the fiscal deficit, which is expected to exceed 3 per cent of GDP in 2018. GDP growth is expected to slow over the next two years as it returns to more sustainable levels, with growth of 4.6 per cent expected in 2018 and 4.2 per cent in 2019.

Romania in the EBRD’s 2017-18 Transition Report

Romania in the latest BEEPS survey