Romania is the ninth largest country of the European Union by area, and has the seventh largest population of the European Union with 21.9 million people. Its capital and largest city is Bucharest, the sixth largest city in the EU with about two million people. Romania joined NATO on March 29, 2004, the European Union on January 1, 2007 and is also a member of the Latin Union, of the Francophonie, of the OSCE, of the WTO, of the BSEC and of the United Nations. Today, Romania is a unitary semi-presidential republic, in which the executive branch consists of the President and the Government. Now that you know some background information, let’s talk about trade in Romania and whether it’s worth investing in.
Imports, exports and trade in Romania
With a GDP of around $325 billion in PPP terms and a GDP per capita of $15,291 for the year 2011, Romania is an upper-middle income country economy, according to the IMF. Exports have increased substantially in the past few years, with a 13% annual rise in exports in 2010. Romania’s main exports are cars, software, clothing and textiles, industrial machinery, electrical and electronic equipment, metallurgic products, raw materials, military equipment, pharmaceuticals, fine chemicals, and agricultural products. Trade is mostly centered on the member states of the European Union, with Germany and Italy being the country’s single largest trading partners. According to a 2011 World Bank report, Romania currently ranks 72nd out of 175 economies in the ease of doing business, scoring lower than other countries in the region such as the Czech Republic. Following commerce, tourism is the second largest component of the services sector. Tourism is one of the most dynamic and fastest developing sectors of the economy of Romania and is characterized by a huge potential for development. According to the World Travel and Tourism Council, Romania is the fourth fastest growing country in the world in terms of travel and tourism total demand, with a yearly potential growth of 8% from 2007 to 2016.
Romania and the financial downturn
Romania was heavily affected by the global financial downturn and gross domestic product contracted by 7.2% in 2009,forcing the government to enact harsh austerity measures and borrow heavily from the IMF, according to the Wall Street Journal. The economy grew relatively little with a growth rate of 2% in 2011. Romania has been successful in developing its industrial sector in recent years. Industry and construction accounted for approximately 32% of gross domestic product GDP in 2003, a comparatively large share even without taking into account related services. The sector employed 26.4% of the workforce. Romania also excels in the production of automobiles, machine tools, and chemicals. The Romanian economy can be broken down into various sectors according to these figures, with agriculture: 12.4%; industry: 35%; services: 52.6%. During the first trimester of 2010, Romanian exports increased by 21%, one of the largest rates in the European Union, surpassed only by Malta.
Overall, Romania is a mixed bag in terms of investment or doing trade in. Since, it is heavily reliant on the Eurozone for much of its economic growth. So any European financial crises is likely to have a big impact on the Romanian economy. The one good thing is that Romania does not have the Euro as its currency, so it is somewhat protected from the full impact of the Eurozone crises. But just how much protection it has, remains to be seen. In terms of business environment, Romania has a relatively business friendly environment, as evidenced by the World Bank survey. To find out more about investing in Romania, you can visit their national website at Invest in Romania (http://www.romtradeinvest.ro/).