| Date - Field | Romania - Economy - overview |
2008 January
Economy - overview | Romania, which joined the European Union on 1 January 2007, began the transition from Communism in 1989 with a largely obsolete industrial base and a pattern of output unsuited to the country's needs. The country emerged in 2000 from a punishing three-year recession thanks to strong demand in EU export markets. Domestic consumption and investment have fueled strong GDP growth in recent years, but have led to large current account imblances. Romania's macroeconomic gains have only recently started to spur creation of a middle class and address Romania's widespread poverty. Corruption and red tape continue to handicap its business environment. |
2007 January
Economy - overview | Romania began the transition from Communism in 1989 with a largely obsolete industrial base and a pattern of output unsuited to the country's needs. The country emerged in 2000 from a punishing three-year recession thanks to strong demand in EU export markets. Despite the global slowdown in 2001-02, strong domestic activity in construction, agriculture, and consumption have kept GDP growth above 4%. However, macroeconomic gains have only recently started to spur creation of a middle class and address Romania's widespread poverty, while corruption and red tape continue to handicap the business environment. Romanian government confidence in continuing disinflation was underscored by its currency revaluation in 2005, making 10,000 "old" lei equal 1 "new" leu. The economy grew at 6.4% in 2006, the strongest growth in the last decade. Romania joined the European Union on 1 January 2007, and the IMF has praised the country's recent reform efforts in preparation for EU accession. |
2006 January
Economy - overview | Romania began the transition from Communism in 1989 with a largely obsolete industrial base and a pattern of output unsuited to the country's needs. The country emerged in 2000 from a punishing three-year recession thanks to strong demand in EU export markets. Despite the global slowdown in 2001-02, strong domestic activity in construction, agriculture, and consumption have kept growth above 4%. An IMF standby agreement, signed in 2001, has been accompanied by slow but palpable gains in privatization, deficit reduction, and the curbing of inflation. The IMF Board approved Romania's completion of the standby agreement in October 2003, the first time Romania has successfully concluded an IMF agreement since the 1989 revolution. In July 2004, the executive board of the IMF approved a 24-month standby agreement for $367 million. The Romanian authorities do not intend to draw on this agreement, however, viewing it simply as a precaution. Meanwhile, recent macroeconomic gains have done little to address Romania's widespread poverty, while corruption and red tape continue to handicap the business environment. |
2005 January
Economy - overview | Romania began the transition from Communism in 1989 with a largely obsolete industrial base and a pattern of output unsuited to the country's needs. The country emerged in 2000 from a punishing three-year recession thanks to strong demand in EU export markets. Despite the global slowdown in 2001-02, strong domestic activity in construction, agriculture, and consumption have kept growth above 4%. An IMF standby agreement, signed in 2001, has been accompanied by slow but palpable gains in privatization, deficit reduction, and the curbing of inflation. The IMF Board approved Romania's completion of the standby agreement in October 2003, the first time Romania has successfully concluded an IMF agreement since the 1989 revolution. In July 2004, the executive board of the IMF approved a 24-month standby agreement for $367 million. The Romanian authorities do not intend to draw on this agreement, however, viewing it simply as a precaution. Meanwhile, recent macroeconomic gains have done little to address Romania's widespread poverty, while corruption and red tape continue to handicap the business environment. |
2004 January
Economy - overview | Romania began the transition from Communism in 1989 with a largely obsolete industrial base and a pattern of output unsuited to the country's needs. The country emerged in 2000 from a punishing three-year recession thanks to strong demand in EU export markets. Despite the global slowdown in 2001-02, strong domestic activity in construction, agriculture, and consumption have kept growth above 4%. An IMF Standby Agreement, signed in 2001, has been accompanied by slow but palpable gains in privatization, deficit reduction, and the curbing of inflation. The IMF Board approved Romania's completion of the standby agreement in October 2003, the first time Romania has successfully concluded an IMF agreement since the 1989 revolution. Nonetheless, recent macroeconomic gains have done little to address Romania's widespread poverty, while corruption and red tape hinder foreign investment. |
2003 January
Economy - overview | Romania began the transition from Communism in 1989 with a largely obsolete industrial base and a pattern of output unsuited to the country's needs. The country emerged in 2000 from a punishing three-year recession thanks to strong demand in EU export markets. Despite the global slowdown in 2001-02, strong domestic activity in construction, agriculture, and consumption have kept growth above 4%. An IMF Standby Agreement, signed in 2001, has been accompanied by slow but palpable gains in privatization, deficit reduction, and the curbing of inflation. Nonetheless, recent macroeconomic gains have done little to address Romania's widespread poverty, while corruption and red tape hinder foreign investment. |
2002 January
Economy - overview | Romania, one of the poorest countries of Central and Eastern Europe, began the transition from Communism in 1989 with a largely obsolete industrial base and a pattern of output unsuited to the country's needs. Over the past decade economic restructuring has lagged behind most other countries in the region. Consequently, living standards have continued to fall - real wages are down perhaps 40%. The country emerged in 2000 from a punishing three-year recession thanks to strong demand in EU export markets, and despite the global slowdown in 2001, strong domestic activity in construction, agriculture, and consumption led to 4.8% growth. A standby agreement with the IMF - covering the period October 2001 to March 2003 - provides a key opportunity for vigorous privatization, regulatory reform, deficit reduction, and the curbing of inflation. The government in the past has not been able to fully implement IMF agreements; its degree of success in this case will affect prospects for joining the EU. |
2001 January
Economy - overview | Romania, one of the poorest countries in Central and Eastern Europe, began the transition from communism in 1989 with a largely obsolete industrial base and a pattern of output unsuited to the country's needs. Over the past decade economic restructuring has lagged behind most other countries in the region. Consequently, living standards have continued to fall - real wages are down over 40%. Corruption too has worsened. The EU ranks Romania last among enlargement candidates, and the European Bank for Reconstruction and Development (EBRD) rates Romania's transition progress the region's worst. The country emerged in 2000 from a punishing three-year recession thanks to strong demand in EU export markets. A new government elected in November 2000 promises to promote economic reform. Bucharest hopes to receive financial and technical assistance from international financial institutions and Western governments; negotiations over a new IMF standby agreement are to begin early in 2001. If reform stalls, Romania's ability to borrow from both public and private sources could quickly dry up, leading to another financial crisis. |
2000 January
Economy - overview | After the collapse of the Soviet Bloc in 1989-91, Romania was left with an obsolete industrial base and a pattern of industrial capacity wholly unsuited to its needs. In February 1997, Romania embarked on a comprehensive macroeconomic stabilization and structural reform program, but reform subsequently has been a frustrating stop-and-go process. Restructuring programs include liquidating large energy-intensive industries and major agricultural and financial sector reforms. In 1999 Romania's economy contracted for a third straight year - by an estimated 4.8%. Romania reached an agreement with the IMF in August for a $547 million loan, but release of the second tranche was postponed in October because of unresolved private sector lending requirements and differences over budgetary spending. Bucharest avoided defaulting on mid-year lump-sum debt payments, but had to significantly draw down reserves to do so; reserves rebounded to an estimated $1.5 billion by yearend 1999. The government's priorities include: obtaining renewed IMF lending, tightening fiscal policy, accelerating privatization, and restructuring unprofitable firms. Romania was invited by the EU in December 1999 to begin accession negotiations. |
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This page was last updated on 23 July, 2008 |
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