Romania Country Intelligence Report

July 2013

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Macroeconomic data

2011 2012 2013 2014 2015 2016

Real GDP Growth Rate (y/y %) 2.2 0.7 1.4 2.7 3.5 3.6

Nominal GDP (US$ bil.) 182.6 170.9 185.6 197.3 218.2 245.7

Nominal GDP Per Capita (US$) 8.519 7.989 8.697 9.269 10.271 11.594

Consumer Price Index (% change) 5.8 3.3 4.7 3.2 3.0 3.1

Exchange Rate (LCU/US$, end of period) 3.34 3.36 3.35 3.35 3.10 3.00

Inflation (annual average %) 5.8 3.3 4.7 3.2 3 3.1

Unemployment rate 5.4 5.1 5.3 4.6 4.5 4.3

► The largest market in South East Europe

► 2nd largest market in Central and Eastern Europe

► One of the biggest markets in the European Union (the 9th largest market among the EU Members States whose stable population exceeds 19 million inhabitants)

► Access to the Black Sea region (Romania, Bulgaria, Turkey, Georgia, Russia and Ukraine) – one of the fastest growing and one of the largest economic area outside Asia (300 millions consumers)

Source: IHS Global Insight 2013

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SWOT analysis

STRENGHTS► Strategic location between Central and Eastern Europe.► In the first quarter of the year, GDP grew 0.7%, exceeding

the projections of 0.5%.► While in January – April 2012 the current account was in

deficit of EUR 1.534, in the same period of this year, the account registered a surplus of EUR 54 million.

► The industrial output grew 6.3% in the first four months of 2013.

► The consolidated public-sector budget deficit in 2012 is estimated at 2.4% of GDP, down from 4.1% of GDP a year earlier.

WEAKNESSES► Tensions between the coalition and the president Traian

Băsescu.► Romania's accession to the EU's free-movement Schengen

area remains on hold given a lack of unanimity on the issue among fellow EU member states.

► The population is in long-term decline.► Corruption, cronyism, and occasional threats to the

independence of the judiciary.► One of the worst performers of eastern and southern EU

member states when it comes to making use of money available from the EU's regional development fund.

OPPORTUNITIES► Planned investments ready to be used for the

underdeveloped infrastructure in the country.► Romania's operational environment has been steadily

improving over the past decade as the country seeks to attract higher levels of foreign direct investment (FDI).

► Growing Automotive and IT sectors.► Romania has the largest proven oil reserves in the Balkans,

at almost 1,000 million barrels, as well as natural gas reserves.

THREATHS► Romania close co-operation with the US on the missile

defense system and deployment of troops in Afghanistan have increased the country's international profile alongside the risk of a potential terrorist attack.

► Downturn in world economy competition from countries of low production costs.

Source: IHS Global Insight 2013

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Industrial Outlook

1. Automotive 2. IT&C 3. Green Energy 4. Oil & Gas

• The 4th largest vehicle manufacturer in CEE

• One of the fastest growing IT markets in Central and Eastern Europe

• Very important renewable sources potential

• The 1st oil producer in Central and Eastern Europe

• 9 billion Euro contribution to Romania’s GDP (2010)

• IT&C market value in 2011: 7 billion Euro

• The 10th most attracting country in the world in wind energy investment

• The 1st producer of natural gas in Central and Eastern Europe

• Growing automotive clusters: more than 500 automotive industry suppliers

• 8000 software and IT service companies

• The 13th most attracting country in the world regarding renewable energy investment

• The 1st petroleum industry in South Eastern Europe

• The 2nd global car producers: Renault, Ford

• Main IT outsourcing and custom software development centers: Bucureşti, Timişoara, Cluj-Napoca and Iaşi

• 18 billion Euro projected investments in the sector by 2020

• The 3rd in the UE in terms of oil reserves with 4 million tons of oil per year

• Qualified labor force and competitive operational costs

• Hardware market growth perspective up to 1billion USD in 2015

• 4000 MW installed power in 2020 following the implementation of the government renewable energy sources promotion strategy

• The only country producing oil in the Black Sea (offshore)

Source: Romania Your Business Partner 2012

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Index of Economic Freedom

Source: Heritage.org

Source: Heritage.org