Romania: country overview12 July 2012
by Ina Dimireva -- last modified 30 January 2017
Romania, which joined the European Union on 1 January 2007, began the transition from Communism in 1989 with a largely obsolete industrial base and a pattern of output unsuited to the country's needs. The most important sectors of Romania’s economy in 2015 were industry (26.4 %), wholesale and retail trade, transport, accommodation and food services (17.9 %) and public administration, defence, education, human health and social work activities (11.7 %). Romania’s main export partners are Germany, Italy and France, while its main import partners are Germany, Italy and Hungary.
Geographical size: 238 391 km2
Population: 19 870 647 (2015)
Population as % of total EU: 3.9 % (2015)
Gross domestic product (GDP): € 160.353 billion (2015)
Official EU language(s): Romanian
Political system: semi-presidential republic
EU member country since: 1 January 2007
Seats in the European Parliament: 32
Currency: Romanian Leu RON
Schengen area member? No, Romania is not a member of the Schengen Area.
Presidency of the Council: Romania will hold the revolving presidency of the Council of the EU for the first time in 2019.
Romania, in south-east Europe, is mountainous in the north while the main feature in the south is the vast Danube valley. The river forms a delta as it approaches the Black Sea, which is a wildlife reserve for countless native and migratory birds.
The Romanian parliament consists of two chambers, the Senat (Senate) and the Camera Deputatilor (Chamber of Deputies). The members of both are chosen in elections held every four years.
Ethnically, the population is 90% Romanian and 7% Hungarian. The Romanian language, like a number of others in southern Europe, is directly descended from Latin, although Romania is separated from other Romance-language countries by Slav speakers. Romania has considerable natural resources – oil, natural gas, coal, iron, copper and bauxite. Metal-working, petrochemicals and mechanical engineering are the main industries.
Romanian speciality dishes include grilled meatballs, meat wrapped in cabbage leaves, pork stew with garlic and onions and doughnuts made with cream and cheese.
The spine-chilling tale of Dracula was inspired by the 15th century Romanian Count Vlad Dracul whose son was famous in wartime for impaling captured enemies. Less notorious Romanians include the writer Eugene Ionesco, the gymnast Nadia Comaneci and the composer George Enescu.
Romania, which joined the EU on 1 January 2007, began the transition from communism in 1989 with a largely obsolete industrial base and a pattern of output unsuited to the country's needs. Romania's macroeconomic gains have only recently started to spur creation of a middle class and to address Romania's widespread poverty. Corruption and red tape continue to permeate the business environment.
In the aftermath of the global financial crisis, Romania signed a $26 billion emergency assistance package from the IMF, the EU, and other international lenders, but GDP contracted until 2011. In March 2011, Romania and the IMF/EU/World Bank signed a 24-month precautionary standby agreement, worth $6.6 billion, to promote fiscal discipline, encourage progress on structural reforms, and strengthen financial sector stability; no funds were drawn. In September 2013, Romanian authorities and the IMF/EU agreed to a follow-on standby agreement, worth $5.4 billion, to continue with reforms. This agreement expired in September 2015, and no funds were drawn. Progress on structural reforms has been uneven, and the economy still is vulnerable to external shocks.
Economic growth rebounded in 2013-15, driven by strong industrial exports and excellent agricultural harvests, and the fiscal deficit was reduced substantially. Industry outperformed other sectors of the economy in 2015. Exports remained an engine of economic growth, led by trade with the EU, which accounts for roughly 70% of Romania trade. Domestic demand was a second driver, due to the mid-2015 cut, from 24% to 9%, of the VAT levied upon foodstuffs. In 2015, the government of Romania succeeded in meeting its annual target for the budget deficit, the external deficit remained low, even if it rose due to increasing imports. For the first time since 1989, inflation turned into deflation, allowing for a gradual loosening of monetary policy throughout the period.
An ageing population, significant tax evasion, insufficient health care, and an aggressive loosening of the fiscal package jeopardize the low fiscal deficit and public debt and are the economy's top vulnerabilities.
Source: Europa, CIA World Factbook