Romania is a country in southeastern Europe. The public capital is Bucharest. Romania came to a satellite of the Union of Soviet Socialist Democracy (U.S.S.R.) in 1948. The country was governed by communist rule from 1948 until 1989 when the governance of Romanian leader Nicolae Ceaușescu was overthrown. Free choices were held in 1990. During the year 2004, the country linked with the North Atlantic Treaty Organization (NATO), and in 2007 it became a member of the European Union (EU). The country with a total population of over 19 million people, remains an attractive destination from a foreign investor’s perspective, as well as the most important trading mate in the region of SouthEastern Europe. Its economy contracted by 3.9 percent in 2020, especially due to exertion disturbance caused by the epidemic lockdown, the results are slightly better than reading on the morning of the health extremity. Reports place Romania among the European countries with the smallest diminishments in the volume of exertion compared to the same period in 2019.
Economy
The gross fixed capital conformation in Romania registered an increase of 4.4 percent transferring a positive signal to the economy. Indeed, however, Romania has registered a drop in private consumption in 2020, vaticinations estimate a better performance this time and an increase of 3.7 percent for 2021. In 2020, the severance rate in Romania remained steady at 3.92 percent. As anticipated, the volume of exports has been affected by the Covid19 outbreak and contracted by 11 percent in 2020. Nevertheless, exports are anticipated to bring back by 13 percent in 2021. Romania mainly exports motorcars and vehicle corridors, insulated electric drivers, and petroleum oils, while senses are led by mechanical and vehicle engineering products and reused goods.
Foreign investment
The main reasons for the good economy in recent times have been duty cuts, high direct investments by foreign companies, and generally good profitable trends (especially IT, outsourcing, communication, retail, and the automotive sedulity). The general investment climate in Romania – as an EU member state and an important ally in NATO – has continuously bettered in recent times, while helping Romania to gain credibility in the eyes of investors. Foreign investors still profit from cheap labor and product costs, as well as a competitive duty system.
Romania’s economy is majorly grounded on the following sectors:
- Services are the most important sector for the Romanian economy (58.2 percent of the GDP);
- Construction sedulity increased by 17 percent compared to the former time;
- Sedulity especially vehicles negotiating products (28.2 percent of GDP), presently employs over 30 percent of the active population.
- The agriculture sector represents around 4.1 percent of the country’s GDP and according to data from Eurostat reports, Romania is considered to be one of the biggest agricultural directors in the European Union.
- The Information and Communication Technology (ICT) sector registered a harmonious growth in recent times counting for around 6 percent of GDP.
- These sectors offer truly good investment openings for foreign investors and have good growth eventuality. This rapid fire growth is anticipated to break down in 2020 and 2021 due to the global epidemic but will remain above 3 percent and reach 4 percent by the end of this time. Overseas investment should also accelerate in 2020 and 2021, according to estimates.
Takeaway
Given the worldwide outbreak of Covid19 and the associated weaker global economy, the Romanian economy will most presumably be affected. The Romanian government has formerly taken profitable and duty measures to support businesses. To what extent these recovery measures will be effective is presently rather delicate to prognosticate, but they have a positive impact at the moment.
Indeed, Romania will keep offering incomparable openings for foreign investors and a positive business climate, due to its strategic position, duty structure, and educated labor force.
