La political scene in Romania, today, sees the two main parliamentary groups as protagonists, the National Union for the Progress of Romania (NUPR) and the Conservative Party (CP). The governing coalition formed by these two sides guarantees governance for both chambers of the Romanian parliament. Romania has been a member of the EU since 1 January 2007. Periodically Brussels monitors the economic and institutional progress of the country which it represents one of covenants for Romania's entry into the EU. In the last report of January 2015, the Brussels experts, while positively evaluating the progress in adapting national legislation to the Community one, have identified some structural reforms on the subject of corruption, judicial system e privatization of state enterprises (on this last point, see the in-depth study by my colleague Guido Michieletto at the following link: https://www.firstonline.info/a/2015/02/07/romania-ripensare-ora-il-ruolo- delle-imprese-di-st/b700b372-c9e2-48c9-b17b-2f6a3dd2d817).
After the deep recession of 2009 (-7,1% ), Romania recovered with an accelerated dynamics of the GDP in 2013 (+3,5%), mainly due to the export (+ 5,3 percentage points of GDP). in the first nine months of 2014 the GDP grew again by 2,9% year on year thanks to the strong push of the industrial production, up 7,4% year-on-year. Exports also continued to grow, reaching +8,1% year/year. Thanks to a unemployment rate very low (5,2% in November), domestic demand and private consumption increased, largely contributing to GDP growth (4,3 percentage points). However, the strengthening of domestic demand has led to an increase in cheap imports. This, in turn, negatively affected the balance of trade.
On the supply side, in 2014, they grow services (+1,9%) and sector manufacturing (+8,4% year/year from January to October), with the machinery and plant sector (expanding by 12,7%) among the most dynamic together with that of durable goods (+9,0%).
For the 2015, the analysts of Intesa Sanpaolo expect a GDP growth of 2,8%, also thanks to the recovery of EU transfers, blocked in 2009 due to the excessive deficit procedure and readmitted with a subsequent resolution in June 2013. Other factors supporting Romanian economic growth will be higher household income, unemployment rate and the expansive orientation of both national and European monetary policies.
Inflation it decreased to 0,8% in December, bringing the average for the year to 1,1%. Despite the drop in oil prices, an increase in consumer prices is expected in the coming months as a result of the increase in domestic demand.
It is expected that already in 2014 the budget deficit in Romania it fell to 1,9% of GDP from 2,5% the previous year.
On the revenue side, the reduction in VAT and the increase in social contributions were offset by the increase in excise duties on fuel and by the extension of the tax base of the wealth tax. Last December, the Government approved the 2015 budget. Differently from what was declared, the Government, on the indication of the IMF (International Monetary Fund), will not further reduce the VAT rate. This move will allow the government to further reduce the budget deficit, which in 2015 is estimated at around 1,6% of GDP, and consequently also the debt, projected at around 39% of GDP (estimates by Economist Intelligence Unit).
For 10 years now, monetary policy is conducted in an inflationary regime. For the current year and for 2015, the National Bank of Romania (NBR) has established theobiettivo for end-of-period inflation al 2,5%. Given these expectations, the NBR it loosened its monetary policy by reducing, during these years, the policy interest rate down to the current 2,5%.
The containment of the deficit, combined with the excellent performance of the real economy, have favored a substantial stability of the exchange rate, fixed around 4,44 leu per euro in the last year.
even the current deficit of the trade balance was relatively limited (2,4% of GDP) but an increase is expected in 2015, due to the expected growth of domestic demand and, therefore, of imports.
Analyzing the main ones liquidity indicators at present, no particular critical issues emerge for Romania. The Reserve Cover Ratio, which indicates the country's ability to cover the current deficit and maturing financial commitments with official reserves, is estimated byEIU (Economist Intelligence Unit) equal to 2, i.e. well above the alert threshold represented by the unit. However, the main threat for the Romanian economy the excess remains foreign debt, equal to about 67% of GDP. Forecasts that the current deficit is on the rise frighten the country and the markets. In any case, if, despite increasing, the deficit were to remain below 3%, the foreign debt could fall further in the next few years, stabilizing at around 60%.
Le institutional reforms and strengthening of the economy have restored hope and competitiveness to a country, Romania, with enormous economic potential. In 2015, the IMF predicts that the GDP can return to growth at the rate of 3,5% the year and rating agencies, Fitch e S&P, attribute to Romania a rating equal to that of Italy, BBB-. The future of Romania, after the openings in Brussels, therefore remains in his hands: "Homo faber fortunae suae". If the government will be able to implement the judicial reforms, fight the corruption e privatize state enterprises, Romania could become, today more than ever, the new one Mecca for many Italian companies looking to East. Russian-Ukrainian conflict in fact, it has weakened the migration of our businesses to the Balkan regions and encouraged the re-shoring. In this context, the Romanian growth could, on the one hand, represent a new incentive for Italian companies to reinvest in that area; on the other, laugh hope to an entire region, the Balkan region, which today lives on the edge between two opposing realities: the Ukrainian war and the flourishing European recovery.
