Transcript Slide 1

EU Economy –
Lessons Learned by a Newcomer:
Romania
Wednesday, 28 September 2011
Romanian economic
developments
in the European context
London, September 28, 2011
Radu Şerban
Romania
and UK –
strategic
partners
21.5
16.4
11.2
10.6
10.6
10.5
10
9.1
8.3
7.6
5.5
5.4
5.3
4.4
3.4
2.3
2
1.3
0.8
0.5
0.4
46.9
38.2
63.8
60.9
60.1
82.3
90
80
70
60
50
40
30
20
10
0
Germany
France
UK
Italy
Spain
Poland
Romania
Netherla
Greece
Belgium
Portugal
Czech
Hungary
Sweden
Austria
Bulgaria
Denmark
Slovakia
Finland
Ireland
Lithuania
Latvia
Slovenia
Estonia
Cyprus
Luxembo
Malta
Population, millions
Romania, the 7th largest EU Member State, in
terms of population
Romania 7th
21.5 mil
643.5
504.8
450
357
312.7
337
301.3
244.8
238.4
131.9
110.9
93
92.9
83.9
78.9
70.3
65.2
64.6
48.8
45.2
43.1
41.5
30.5
20.3
9.3
2.6
0.3
700
600
500
400
300
200
100
0
France
Spain
Sweden
German
Poland
Finland
Italy
UK
Romania
Greece
Bulgaria
Hungary
Portugal
Austria
Czech
Ireland
Lithuania
Latvia
Slovakia
Estonia
Denmark
Netherla
Belgium
Slovenia
Cyprus
Luxemb
Malta
th sq km
Romania, the 9th Member State, in terms of area
Romania 9th
238.400 sq km
1,500
1,000
500
0
570
310
337
293
277
237
223
164
171
168
137
116
93
63
36
4.4
3.4
2.3
2
1.3
0.8
0.4
2,500
2,000
2,409
1,907
1,567
1,521
1,051
3,000
Germany
France
UK
Italy
Spain
Netherlands
Poland
Belgium
Sweden
Austria
Greece
Denmark
Ireland
Finland
Portugal
Czech Rep
Romania
Hungary
Slovakia
Bulgaria
Luxembourg
Lithuania
Latvia
Slovenia
Estonia
Cyprus
Malta
Bn €
Romania, the 17th largest EU Member
State, in terms of GDP
Romania
17th
% of GDP
Public debt
90
80
70
60
50
40
30
20
10
0
80
85.1
30.8
EU 27
Euro zone
Romania
Budget deficit
0
% of GDP
-1
EU 27
Romania
-6.4
-6.4
-2
-3
-4
-5
-6
-7
Unemployment
12
10
9.7
10.2
7.4
8
%
In July 2011
only 4.7 %
6
4
2
0
EU 27
Euro area
Romania
Minimum wages
Romania
268
7.2
5.8
Germany
1.2
UK
1.8
Hu ngary
2.2
Cz ec h Rep
2.8
Slova kia
3.13
Bulgaria
5.2
Poland
8
7
6
5
4
3
2
1
0
Ro ma nia
bn.$
Greenfield investments attracted JanuaryApril 2011
Source: UNCTAD
Report July 2011
Energy dependence
50,5
60
40
28
20
0
EU
Romania
Share of imports in total energy consumption, %
BP plans a new gas pipeline:
SOUTH –EAST EUROPE PIPELINE,
a possible alternative to Nabucco
September 26, 2011
% of positive answers
Optimism about the future of EU - Eurobarometer
2011
70
68
66
64
62
60
58
56
54
68
59
EU 27
Romania
If you want to find enthusiastic Europeans come to Bucharest!
BBC4, 19 Sept. 2011
% of positive answwers
Citizens in favour of the accession of Turkey to EU Eurobarometer 2011
70
61
60
50
52
52
48
41
40
30
20
10
0
Romania
Hungary
Sweden
Slovenia
Lithuania
Global ranking in 2010
World Bank Report
Greece
78
Italy
Luxembourg
74
Czech Rep
64
72
Poland
55
62
Spain
120
100
80
60
40
20
0
Romania
Ease of doing business
109
20%
15%
16%
Po
la
nd
Sl
ov
ak
ia
Cz
ec
h
Re
p.
Sl
ov
en
ia
Bu
lg
ar
ia
Ro
m
an
ia
Hu
ng
ar
y
Corporate tax
25%
19%
19%
19%
21%
16%
10%
10%
5%
0%
EU Funds
10
3.5
bn.€
0
-10
Total EU funds 20072013
-20
-30
-40
-32
Absorbed
Available EU funds for 2011-2013
35
28.5
30
bn. €
25
20
15
10
5
0
-5
-10
Absorbed
-3.5
Available
TOURISM – huge potential
Most visited zones in Romania
Others
Bucovina
Transylvania
Bucharest
Moldova
Carpathian Mountains
Seaside
Maramures
Target: to meet
criteria in 2015
Inflation rate
Refere
nce
value
No more than
1.5 percentage
points higher
than the
average of the
three best
performing
member states
of the EU
max 3.0%
8% in 2010,
3% target 2011
Convergence criteria for eurozone
Government finances
annual
gross
governmen government
t deficit to
debt to
GDP
GDP
max. 3%
6.4%, 3 %
in 2012
max. 60%
30.8%
ERM II
membership
min. 2 years
0 years, but
constant X rate in
the last 2 years
Interest
rate
not more
than 2
percentage
points higher
than in the
three lowest
inflation
member
states
max 6.4%
6.4%
Exchange rate in Euro
Annual rate of inflation – red line
National Bank of Romania,
estimates
Current account balance
% of GDP
Including reinvested profit
NCP prognosis
Total Risk Index: credit trends, loan/deposit ratios, debt levels,`
current account balances, exports, and FX reserves
Romania, between
Switzerland and Germany
Source: UBS, December
2010
Romania’s sovereign rating by CRAs
Fitch
Moody’s
Standard &
Poor’s
Investment grade
July 2011: upgraded from
BBB- to BB+
Baa3
BB+
FT July 5: Stefan Wagstyl
Romania: National Reforms Program 2011 – 2013 (published April 2011)
Main objectives:
Major targets
GDP growth
 Resuming the growth
and creating new
jobs
Inflation
1.5% in 2011, EBRD: 1.9%; 3.8%/2012
4.8 % in 2011 and ≤ 3 % next year
C/A deficit
-4.3%
Budget deficit
Sustainable public
finances
-3% in 2012
Government debt/ GDP
Protecting the
vulnerable categories
of population etc.
30.8%
Qualitative elements:
From
A factor driven
economy
To
An innovation driven
economy
Romania
and UK –
strategic
partners
FT, Sept 15, 2011