Detailed Review of Romania’s Economy
Undertaking mass privatizations of Government holdings in the early 1990s Romania transformed itself into a market economy following its independence from the USSR. Having opted for a liberal economy, which was the systematic trend among former Soviet bloc nations, Romania has experienced sustained growth. Romania was significantly affected by the 2008 crisis. The country has always been one of the poorest in the EU, and its growth estimate for 2014 is 2.5%.
Romanian agriculture still employs a significant share of the country’s active population (28%) and produces mainly potatoes, beets and grains. The forestry sector is a growth area due to Romania’s extensive forests.
Industry, which accounts for 37% of Romania’s GDP, attracts a lot of Foreign Direct Investment in the metallurgy and steel industries, and manufacturing is also an important sector. Recently, high-tech industry has also developed due to improved employee qualifications. The services sector represents half of the country’s GDP, and tourism is increasing its market share of this sector.
With more imports than exports, Romania is dependent on the external market. It primarily imports electrical and mechanical equipment. Romania’s main trade partner is the EU.
Romania’s Economic Strengths
- Increasingly qualified yet affordable workforce.
- EU member state, adoption of the Euro is scheduled for 2016/17.
- Vast internal market.
Romania Economic Weaknesses
- High level of corruption.
- Extreme poverty of the population.
- Poorly maintained infrastructure.
The Government of Romania has implemented measures in order to encourage investment, particularly in the energy sector which the government is seeking to privatise.