Romanian GDP: statistics, forecast, features of the economy

2024 Author: Henry Conors | [email protected]. Last modified: 2024-02-12 02:41

A small country in Southeast Europe, after the high-profile events associated with the capture and execution of Nicolae Ceausescu, lives a quiet and peaceful life, almost disappearing from the world information space. In terms of GDP, Romania is ranked 47th in the world, which is higher than the countries of Eastern Europe, with the exception of Poland.

General information

A small state in Southeast Europe covers an area of 238,391 square meters. m, it is the 78th in this indicator in the world. The territory of the country is located in approximately equal parts on flat, hilly and mountainous areas. Through the whole of Romania from the Ukrainian border in the east to the Serbian border in the west, the Carpathians stretch with 14 mountain ranges and with the highest point on Mount Moldoveanu.

The population of the country is about 20 million people (59th in the world). The state is the largest in the region. Romania's GDP per capita is $10,932.33 (2018).

History of the country

The principalities of Wallachia and Moldavia were under the rule of the Ottoman Empire for centuries and only in 1878 became unitedindependent state under the new name - Romania. After World War II, Soviet occupation led to the creation of a "people's" republic.

At the end of 1989, the long-term rule of dictator Nicolae Ceausescu ended, and he himself was executed. But former communists ruled the country until 1996, when they were removed from power. The country joined the Northern Alliance in 2004 and the European Union in 2007. However, the state did not enter into a monetary union, Romania's money is the Romanian leu. According to the type of government, it is a unitary, parliamentary-presidential republic.

History of the country's economy

Before the Second World War, in terms of economic development, Romania lagged behind the advanced European states by almost 100-150 years. At that time, few countries still knew how to calculate GDP, so they compared the level of economic development by individual indicators. Only oil production, timber processing and some other raw materials industries that are attractive to foreign capital were relatively developed in the state.

According to the statistics of 1938, the share of foreign investment in the oil industry was 92%, in electricity production - 95%, in metallurgy - 74%, chemical - 72%. The country's large monopolies actively cooperated with Germany.

In the post-war years, the construction of socialism began in the country, industrial enterprises were nationalized, land reform was carried out and a state monopoly on international trade was introduced. Since 1949the country developed in accordance with five-year plans, active industrialization began.

After the fall of the Ceausescu regime, market reforms began, providing for a free market, the withdrawal of the state from the economy, and greater integration of the national economy into the world market. By 2002, more than 62% of Romania's GDP came from the private sector, with private sector accounting for 90% of retail trade and over 50% of international trade. Only strategic facilities in the defense complex, nuclear power plants, mechanical engineering and the pipeline network remained in state ownership.

Economic Review

The country has a relatively strong agrarian-industrial economy. Romania's GDP in 2018 was $211.8 billion, the second largest among the post-socialist countries in the region. Due to the rapid pace of development, the country has received the nickname of the Balkan Tiger.

The state is a major producer of automobiles and electronics in the region and one of the most attractive for foreign investment. The country's capital Bucharest is the largest regional economic and industrial center. The country has a developed agriculture, which employs about 40% of the working population. Industry accounts for 35% of Romania's GDP, agriculture for 10% and the service sector for 55%.

In recent years, the Romanian economy has been one of the fastest growing in the EU. GDP growth in percent was in: 2018 - 3.4%, 2017 - 5.4%, 2016 - 4.8%. Country Development Forecastsfor the coming years are also quite favorable. In 2019 and 2020, Romania's GDP will grow at 3.3% per year. After the global financial crisis, the country's economy recovered fairly quickly thanks to strong industrial exports, good agricultural yields and a fiscal expansion policy.

Main Industries

Romania has actively mastered oil production and refining. However, the deposits are gradually depleted, now the explored reserves are no more than 80 million tons. In addition, coal, manganese ores, gold, bauxite, natural and associated gas are mined in Romania. The country imports a small amount of Russian natural gas and transits it to other European countries.

Engineering accounts for half of the country's industrial output. These are mainly cars, electronics, equipment for oil fields, power plants, and the chemical industry. The largest company in Romania remains the car manufacturer Dacia, which is now owned by Renault-Nissan. In addition, General Motors and Ford automobile plants are operating.

The main products of agriculture are: wheat, corn, potatoes, fruits. In the service sector, the majority is in business and finance (20.5%) and tourism and transport (18%).

Development Forecasts

Experts agree that in the near future a fairly rapid growth of the country's economy will continue. While GDP growth will slow tovalues less than 4%, they will still be among the highest in the EU. The economy will be supported by rising household consumption, wages and tax cuts.

The high-tech sector is developing at the fastest pace in the country, which is based on a strong scientific foundation laid down under socialism. The IT sector, which currently employs about 150,000 people, is projected to double its share of Romania's GDP by 2025, reaching 12%. In terms of Internet connection speed, the country is second only to the Asian "tigers" and Iceland in the world.

Western corporations will continue to actively invest in the Romanian economy. For example, Ford has invested 1.2 billion euros over the past decade and intends to expand its production for longer. Many other global companies have announced similar plans, including Siemens, Bosch, Fitbit.