Romania is a very fast developing mixed economy with high income. This is one of the leading nations in central and Eastern Europe. Romania’s economy is based on both, agriculture and industries. However, for centuries, it was only agriculture that contributed to the economy of Romania and after 1950’s they started developing heavy industries as well.
This nation is ranked as the 10th largest in the European Union by the total nominal GDP and it is ranked as the 8th largest depending on its purchasing power parity. As of now, Romania is the 41st economy in the world with $435.454 million annual output. The economy of this nation is developing constantly and it is highly expected to reach $1 trillion by the year of 2035.
Romania’s economical transition
In 1930, the economy of Romania was mainly agriculture. In 1950, they started developing heavy industries with the selection of a new communist leader. In 1970, there was a heavy swift towards the industries and finally, Romania’s free-market transition started in 1991 with a new constitution. They selected their first female prime minister in 2018 to bring further changes in the economy. Vioria Dancila, the new prime minister from the central left social democratic party, was selected in January 2018 and she aimed to eliminate all the corruption.
This nation is situated in a strategic position in the Black Sea. So, this is a big economical advantage. Apart from that, they also have extensive natural resources and some of their leading economic sectors are petroleum fining, mining, auto assembly, footwear, textile, etc. However, stuff like political instability and labor shortage may pose some risk to their economical growth in the future.
The imports of goods and services have increased by 9.3% while the exports of goods increased by 7.6% in 2016. They are rich in natural gas, oil, salt, iron ore, nickel, copper, etc. Some of the top exports of Romania are machinery equipment, vehicles, food products, plastic, transport equipment, pharmaceuticals, rubber, etc. As per the reports, they have the highest growth rates in the EU in 2017 and this is expected to grow by the coming years as well.
Rule of law
The Romanian constitution offers the right to ownership a private organization and property.
Registration of private property is made too easy by the government by digitizing the ownership and land records.
However, the political influences are witnessed everywhere including in the court and this is the only stuff which can hamper the growth of the Romania economy.
The exports and imports are really high in the Romanian nation and the combined value of both is almost 85.0% of the GDP.
The average tariff rate in this nation is 2.0%. However, Romanians apply a number of nontariff trade barriers which includes subsidies, quotas, and some regulation of the product and technical stuff.
Overall, the economy of Romania is very promising and they tend to attract a large part of the foreign direct investment.