Romania 

Romania country policy

Policy established 07 June 2010

• ILC, bank guarantee or central public guarantee (conditional)
• The country ceiling is 1500 mln euro
• Early warning signal 500 mln euro
• - of which was used as at 2011-12-31 3 mln euro

Country class: 4

Romania country facts

Atradius Dutch State Business Economic Research

Country Report last updated :  12 August 2011   
Country :  ROMANIA  

Political Situation

Rather Fragile Coalition

Head of state
President Traian Basescu (DLP).

Form of government
Minority coalition of the centre-right Democratic Liberal Party (DLP) and the Hungarian Union of Democrats in Romania (HUDR), headed by p.m. Emil Boc (DLP). 
 
Internal Economic Situation
Recession Petering Out Slowly

General situation
The economy is slowly recovering from recession: in 2009 /’10 real GDP dropped by 8.4%, especially to a fall in domestic demand (private consumption -10.3%, investments -38.4%). A rebound in exports (+13%) has triggered a weak recovery since 2010 as domestic demand remains subdued by curtailed bank lending and the high private sector debt leverage in €/US$/Swfrancs. Real GDP-growth 1.4% yoy in 2011Q2. Inflation (7.9% June 2011) is  declining only slowly. Solid financial sector with strong commitment by EU parent banks but with large exposure to (forex) indebted private borrowers.
 

External Economic Situation
Very High (Private Sector) Debt Service

Main sources of foreign exchange
Industrial products (cars, machines, textiles), minerals.

Main foreign markets
EU (72%) of which Germany 19% and Italy 16%.

Main expenses of foreign exchange
Machinery/transports (29%), fuels/minerals (11%).

 
Balance of payments 
Since the records in 2007/’08 less high current account deficits because the trade account has improved markedly. But as capital imports (FDI, portfolio, bank credit from parents) have declined as well, still high financing gaps have urged Romania to request for the international support package. NBR regularly intervenes in the market to counter excessive volatility in the exchange rate.