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With the end of Ceausescu's dictatorship, Romanian economy, and in particular the industry was in desolate condition. However, thanks to the support of international donors such as the International Monetary Fund, the World Bank and the EU, Romanian authorities have succeeded to revive the economy in recent years. Nevertheless, Romania remains the second poorest country in the EU, behind Bulgaria, with a per capita income of 9,500 USD.
Romania is rich in natural resources, in particular are natural gas (third largest gas reserves in the EU), coal, salt and oil. Thanks to the extensive gas reserves Romania is minutely dependent on foreign energy imports. With efficiency gains and opening up new sources in the Black Sea, Romania seeks energy independence by 2019.
Romania's economy is heavily dependent on the services sector. It contributes about 67.3 percent of the gross domestic product (GDP), next comes the manufacturing sector (27.3 percent) and finally agriculture (5.4 percent). Main industries include electrical engineering, textile industry, mining, wood industry, chemical industry and the production of auto parts and vehicle. In agriculture, the cultivation of cereals, sugar beet, potatoes and grapes, as well as sheep farming dominate.
The Romanian economy grew in 2014 comparatively well with a growth rate of 2.9 percent. Growth drivers were mainly the retail trade and the export sector. The main market is located in the EU (Germany at the top with 19.3 percent, followed by Italy with 11.9 percent, France with 6.8 percent and Hungary with 5.1 percent according to estimates for 2014). Import goods are mainly sourced from Germany (19.1 percent), Italy (10.8 percent), Hungary (7.9 percent), France (5.7 percent) and Poland (4.6 percent).
The Romanian National Bank for the period from June 2015 to May 2016 has predicted an annual inflation rate of 0 percent. Public debt remains manageable with around 40 percent of GDP. The officially registered unemployment rate currently stands at 5.12 percent (as of April 2015).
Why invest in Romania?
- Romania has one of the lowest corporate tax rate in the European Union, at just 16 percent. (KPMG)
- Given the large size of the country, it is one of the biggest domestic markets in Europe. Thus providing foreign investors with a viable demand force to cater to.
- Being located at the crossroads of Central and Southeastern Europe, Romania acts as a natural bridge between the two regions.
- The country has one of the lowest labor costs in the Eurozone, just ahead of Bulgaria. While the labor force is highly skilled and globalized.
- Romanian property prices are on the lower end of the spectrum when it comes to European property. However, the property prices are going to rise as Romania continues its growth trend. This presents investors with a viable region to invest in, as of now.