Macro Developments of Romania

“The Tiger of the East”

Mariya Kaneva

Stilyana Kandjeva April 1st, 2009

Overview Of The Economic Situation

• 1997 – 2000 recession• Domestic consumption and investment fueled GDP

growth• Rise in inflation (2007-2008)• Strong GDP growth in 2008 moderated by the

financial crisis

Goods Market

Goods Market

Goods Market

• Real GDP growth – 8% (2008)

• GDP per capita - $12,500 (2008)

• GDP composition by sector:– Agriculture – 8.1%– Industry – 36%– Services – 55.9%

• FDI inflows – 6% of GDP (2007)

Goods Market

• Exports:– $59.75 billion f.o.b. (2008 est.)– Commodities: machinery and equipment, textiles and footwear,

metals and metal products, machinery and equipment, minerals and fuels, chemicals, agricultural products

– Exporting partners: Italy, Germany, France, Turkey, Hungary, UK

• Imports:– $92.09 billion f.o.b. (2008 est.)– Commodities: machinery and equipment, fuels and minerals,

chemicals, textile and products, metals, agricultural products– Import partners: Germany, Italy, Hungary, Russia, France,

Turkey, Austria

• Current account balance: -$28.03 billion (2008 est.)/ 12.6% of estimated GDP

Key Indicators – Forecast• Expected

contraction of real GDP

• Current account deficit to narrow sharply

Investment and Saving

Asset Market• Disinflation trend –

reversed• Inflation targeting• Raised interest rates • Increased credit

growth

Labor MarketLabor Force – 9.32 million (2008 est)

By occupation:agriculture: 29.7% industry: 23.2% services: 47.1%

Unemployment rate 3.6% (2008 est.)

Labor Market (cont’d)

Conclusion

• Romania to seek funding from the EU in 2009• Contraction in Real GDP• Recovery of the economy in 2010• Current account deficit to narrow sharply (in

2008, 12.6% of GDP)• Romania has potential• One challenge – to continue structural reforms

and sound fiscal policies after the recession

List of Sources• Economic Data. Economist Intelligence Unit. March 11, 2009.

http://www.economist.com/countries/Romania/profile.cfm?folder=Profile-Economic%20Data

• Factsheet: Romania. Economist Intelligence Unit. March 11, 2009.http://www.economist.com/countries/Romania/profile.cfm?folder=Profile-FactSheet

• Romania. The World Factbook. March 19, 2009.https://www.cia.gov/library/publications/the-world-factbook/geos/ro.html#Econ

• Country Brief 2008: Romania. World Bank. October 2008.http://www.worldbank.org.ro/WBSITE/EXTERNAL/COUNTRIES/ECAEXT/ROMANIAEXTN/0,,contentMDK:20636934~menuPK:287302~pagePK:141137~piPK:141127~theSitePK:275154,00.html

• Romanian Macroeconomic Insight. Macroanalitica.com. May 2008.http://macroanalitica.com/docs/MMI_May_2008_v4.pdf

• Monetary Policy. Central Bank Romania.http://www.bnro.ro/Monetary-Policy-1864.aspx

Thank you for your attention!