Romania » Introduction

Basic Economic Facts

After Romania's Communist regime was overthrown in late 1989, the country experienced a decade of economic instability and decline, led in part by an obsolete industrial base as well as a lack of structural reform. Starting from 2000, however, the economy was transformed into one of relative macroeconomic stability, high growth, low unemployment and increasing foreign investment, and is currently among the most developed in Southeastern Europe. Economic growth since 2000 has averaged 4-5%, rising to 8.3% in 2004. This has characterised Romania as a boom economy and one of the fastest growing in Europe. Romania was granted in October 2004 the much desired 'functional market economy' status by EU officials, and is expected to join the EU in January 2007. Romania's per-capita GDP, calculated by purchasing power parity is estimated to be $10,900 at end of 2005. The national budget is€38.1 billion euro (for year 2006), which represents 33.1% of GDP, estimated to be RON 322.5 billion (€90,8 billion) according to the Prime-Minister Tariceanu.

Strong aspects of Romania are the technologically advanced market economy with substantial government participation. Having its own natural resources, Romania has intensively developed its agricultural and industrial sectors over the past 20 years. Romania is largely self-sufficient in food production. Clothing and textiles, industrial machinery, electrical and electronic equipment, metallurgic products, raw materials, cars, military equipment, software, pharmaceuticals, fine chemicals, and agricultural products (fruits, vegetables, and flowers) are leading exports. Romania possesses extensive facilities for oil refining and semiconductor fabrication.

Despite Romania's rapid economic development, poverty is still a pervasive problem, and modernization's effects are only slowly being felt in the country's rural areas. Entrance to the European Union, however, will further speed up the country's development.