- April 21, 2020
AN OVERVIEW OF ROMANIA`S ECONOMY
ANOVERVIEW OF ROMANIA’S ECONOMY
AnOverview of Romania’s Economy
Romaniais an independent state found in the Southeastern Europe. It has atotal land area of 238, 391 square kilometers and a total populationof about 19.94 million individuals, making it the seventh mostpopulated nation in the European Union. Romaniajoined the European Union in 2007 and NATO in 2004 after developingclose ties with nations in Western Europe(TheHeritage Foundation, 2016).The country has continued to experience a steady economic growth evenafter the 2014 and 2015 political and institutional changes. Thegrowth strategies of the country are mainly based on the EUFramework, which provides the guidelines for economic growth for itsmember states.
AnOverview of the Economy
Asper the year 2015, the nation’s GrowthDomestic Product (GDP) index was 161 EUR bn.The GDP value has been on a constant rise since 2011where it was 133 EUR bn,as put by FocusEconomics(2016).The GDP per capita has also been on a steady increase in the pastfive years (FocusEconomics, 2016). In2011, the GDP per capita was 6,214 EURand later rose to 6,248EUR, 6,790 EUR, and 7,537 EURin the respective years, and later in 2015, the value peaked to 8,097EUR (FocusEconomics,2016).
In2015, the GDPannual variation stood at 3.8%,as put by FocusEconomics(2016),a figure that has risen from 1.1%in 2011.By using the Consumer Price Index’s (CPI) annual variation,Romania’s inflationratehas moved from 3.1%in 2011 to -0.9% in 2015(FocusEconomics, 2016). By using theHarmonizedIndex of Consumer Prices’ (HICP)annual variation, the nation’s inflation rate has changed from 5.8%to -0.4% between 2011 and 2015(FocusEconomics, 2016). The rate of unemployment in the country hasbeen changing over time. Between 2011and 2015,the rate has changed from 7.1to 6.8(FocusEconomics, 2016). The rates have however not been constant asthere was a drop from 7.1in 2011 to 6.9 in 2012,then a rise in 2013to 7.1and another drop in 2014to 6.8– a rate that was maintained in 2015 as shown in FocusEconomics(2016).
Thenation has experienced a constant economic growth for five yearsbetween 2011 and 2015. The growth indicators such as the GDP clearlyindicate this growth. The GDP has consistently been on the rise from133EUR bn in 2011 to 161 EUR bn in 2015(Mugur, 2015). The inflation rate has also declined in the statedfive-year period as indicated by Mugur (2015).
Romania’seconomy is expected to grow by the year 2020 tremendously. The actual(2016) GDPgrowth rate is 0.60%,and this is anticipated to remain the same by the year 2020 as shownby TradingEconomics (2016). The level of unemployment is estimated todrop from 5.9%to 5.1%(TradingEconomics, 2016). TradingEconomics (2016) shows that theindustrial production is likely to grow from 1.40%to 1.71%by the same year while the corporate tax rates are predicted toremain the same throughout the years until 2020.
AlternativeMeasures of the Economic Well-being
Romania’slifeexpectancy stands at 75.1 yearsfor the general population, as put by IndexMundi (2016). The maleshave a life expectancy of 71.7 yearswhile femaleshave a life expectancy of 78.8 yearsas per the 2016 estimates depicted by IndexMundi (2016). Thecountry’s literacyrate stands at 98.8%,as displayed by IndexMundi (2016). According to a 2015 estimate, therate of literatemales stands at 99.1%while that of femalesstands at 98.5%(IndexMundi, 2016). The rates, therefore, indicate that a high numberof the Romanian population with a minimum age of 15 years have theability to read and write.
Accordingto Chindea et al. (2008), the nation’s net migration rate per onethousand people is 0.2migrants,as per the estimates of 2016. In 2006, there were 53,606immigrantsin the country, which is an increaseof eight percentfrom the year 2005 (Chindea et al., 2008). The number of emigrants asper the 2006 statistics was 7,234refugees, and 1,314 asylum seekers,as indicated by Chindea et al. (2008).
TheHeritage Foundation (2016) shows that Romania is ranked at position61globally regarding economy. The nation develops policies that favorits economic growth to ensure that the rate of growth is steady. Someof the strategies have been the reduction of public debts andsimplification of the regulatory burden to maintain growth in theshifting economic conditions of the world.
Chindea,A., Magdalena, M., Mattila, H., & Pastor, I. (2008). Migration inRomania: A Country Profile 2008. Retrieved November 16, 2016, fromhttp://publications.iom.int/books/migration-romania-country-profile-2008
FocusEconomics.(2016, October 31). Romania Economy – GDP, Inflation, CPI andInterest Rate. Retrieved November 16, 2016, fromhttp://www.focuseconomics.com/countries/romania
IndexMundi.(2016, October 8). Romania Demographics Profile 2016. RetrievedNovember 16, 2016, fromhttp://www.indexmundi.com/romania/demographics_profile.html
Mugur,I. (2015, October 19). Romania’s economic outlook. RetrievedNovember 16, 2016, fromwww.bnr.ro/DocumentInformation.aspx?idInfoClass=6885&idDocument…1Cached
TheHeritage Foundation. (2016). 2016 Index of Economic Freedom: Romania.Retrieved November 16, 2016, fromhttp://www.heritage.org/index/country/romania
TradingEconomics. (2016). Romania | Economic Forecasts | 2016-2020 Outlook.Retrieved November 16, 2016, fromhttp://www.tradingeconomics.com/romania/forecast