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 2012-12-29 2 mln euro

Country class: 4

Romania country facts

Atradius Dutch State Business Economic Research

Country Report last updated :  12 February 2012

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), the etnic Hungarian Union of Democrats in Romania (HUDR) and independents, headed by p.m. Mihai-Razvan Ungureanu. 
 
Internal Economic Situation
Weak Recovery From Recession

General situation
The economy has slowly recovered from the 2009-’10  recession: real GDP has increased by 2% in 2011 largely thanks to a robust rebound of exports; domestic demand continues to be subdued by curtailed bank lending and the high private sector debt leverage in €/US$/Swfrancs.  Markedly declined rate of inflation to a record low : Jan 2012 2.7% within the target range of 2-4%. 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 (precautionary) international support package. NBR regularly intervenes in the market to counter excessive volatility in the exchange rate.