Romania Economy Highlights

Romania - New status, New opportunities

On 1st of January, 2007 Romania became a full-fledged Member State of the European Union. The EU Accession opened huge opportunities for the future, for all Romanian citizens, for local communities, companies and institutions alike, but also for Romania's economic partners.

This is the result of a long path where Romania and the EU worked together to ensure an enlarged Europe even stronger, more democratic and more competitive.

During the recent years, Romania made tremendous progress in improving its business environment and acquiring a steady and sound economic growth.

Starting with January 2005, a 16% flat tax was introduced on profits revenues, which means in fact a reduction by 9 percent as compared to the previous tax rate. Most industrial countries have pursued tax reforms to ensure that their economies remain attractive for investment.

In 2007, Romania reached an 6.1 % GDP growth rate(estimate NCP), among of the highest economic growth rates in Europe. For the upcoming years until 2010, we anticipate an average growing rate of approx. 6. 5%, annually (estimate National Commission of Prognosis Romania Medium Term Prognosis 2007-2013).

The inflation rate decreased substantially, from 40% in 2000, to 5.7 % at the end of 2007 ( RNB analysis).It was the forth consecutive year with just one digit inflation rate. Romanian National Bank forecast a continuation of this trend, leading to expectations for around 5.9 % inflation rate for 2008.

The unemployment rate also registered one of the best performances in Central and Eastern Europe, reaching only 4.3% at the end of 2007, a similar trend for the years to come being foreseen. In fact, the present dynamism of the economy created strong demands for skilled labor force (National Agency for Employment -Monthly unemployment Bulletin).

Macroeconomic Targets

Economic growth
Consolidated macro-stability
Improved business environment
Deep fiscal reform
Privatization for re-launching
To consolidate a stable and predictable business environment

Increase of competitiveness
Increase of the role of research and development;
Promotion of a durable management of resources and environment protection;
Improvement of the professional training and labor employment

Foreign trade in figures

The Romanian Government is stimulating businesses to rethink the way they open towards external markets with quality products, and preferably, with their own trademarks.

We are constantly encouraging the increase in the numbers of exporters on a local and regional level as well as supporting the setup of strong, specialized companies in sectors oriented towards export such as IT, furniture, automotive industry and s.o.

FOB exports in 2007 amounted to 29380.3 million euro. Compared to 2006, exports increased with 13.7 % at values expressed in euro. FOB export during 1.1-28.2 2008 amounted to 5268.3 million EURO .Compared with corresponding period of 2007,the export increased with 20.1% at value expressed in euro.

CIF imports in 2007 amounted to 50882.6 million euro. Compared to 2006 , imports grew of 24.9 at values expressed in euro.

In 2007, the FOB-CIF commercial deficit was 21502.3 million euro.

In the period 1.I-28.2.2008, in comparison with the corresponding period of 2007, exports to the European Union countries (EU 26) increased with 17.8% at values expressed in euro, registering a weight of 71% in total exports.

ROMANIAN FOB EXPORT	2007	2006
Machinary and mechanical appliances;electrical equipment	22,2	20,3
Base metals and articles of base metals	16,5	15,0
Textiles and textiles articles	13,7	16,2
Vehicles and associated transport equipment	11,8	9,7
Mineral products	7,4	10,6
Plastics	5,0	4,2
Footwear,headgear,umbrellas,and similar articles	4,7	5,4
Chemical products	3,8	4,1
Wood,wood charcoal,articles of wood	3,4	3,6

Foreign investment

Starting with 1991, the Romanian legislation has been updated in order to attract foreign capital in the economy. Therefore, in order to stimulate the interest of foreign and local investors for developing new investment projects in Romania, the legal framework has been improved, aiming to identify the most suitable and efficient incentives to be granted to investors for stimulating the development of the economy. The changes of the specific legislation prove a dynamic and flexible legal frame, which is easy, adaptable to the market demands and the current needs of the business environment.

Foreign Investors Incentives

Foreign investors may invest in all Romanian economic sectors.
Equal treatment for Romanian and foreigner, residents and non-residents investors.
No limit in foreign participation in commercial companies- a foreign investor may establish a 100% owned enterprise in Romania.
Protection against expropriation and nationalization.
Full repatriation of capital and profits.
Capital account liberalization.

Total volume of foreign investments

During December 1990 - December 2004, total volume of foreign investments was 10.4 billion Euros, with main investing countries: Netherlands (15.5%), Austria (12.3) France (11%), Germany (8.19%), USA (6.4%) and Italy (5.2%). EU countries made up for over 6o% of total cumulative foreign direct investment in Romania.

An Opportunity - Industrial/Business Parks

A priority: the development and modernization of the infrastructure to facilitate and encourage Romanian and foreign investment in productive activity.

The Romanian Government actively supports the development of industrial / business parks throughout Romania as vital means of promoting inward investment. The FDI Specialized Government Agency ARIS has on its site www.arisinvest.ro detailed information on thirty-seven such parks.

As an expression of its commitment to the development of industrial / business parks the Government has set aside a fund of 583 billion ROL from the state budget for the period up to 2006 to provide non-reimbursable financial support for park development.

Advantages offered by Romania

ROMANIA has an excellent geographical position in Central Europe, allowing a good access to the markets of Western Europe as well as of former Russian countries
ROMANIA represents the largest market in South-East Europe, with 22 million consumers.
ROMANIA is characterized by political stability and consensus for EU accession.
ROMANIA has recorded a sustainable economic growth and declining inflation.
ROMANIA registers the highest GDP growth rate in the region.
ROMANIA is committed to develop a modern economy.
ROMANIA possesses competitive high skilled labor force, with solid knowledge in technology, IT and engineering.
ROMANIA is committed to continuously improve infrastructure quality.
ROMANIA is granting incentives to foreign investors.
ROMANIA grants non-reimbursable financial support for industrial/ business Park.
ROMANIA has an important tourism potential.
ROMANIA has rich natural resources including fertile agricultural land, oil and gas.
ROMANIA has well developed networks of mobile telecommunications.
ROMANIA offers wide opportunities for sea and river transport, Constanta being the biggest Black Sea port. By the Danube-Black Sea canal, Constanta is linked to the North Sea, via Rhine-Mainz canal
ROMANIA is a NATO member.
ROMANIA has a competitive location, bridging East & West, North & South.