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Romania

According to the National Statistics Committee of Romania, in 2013 Romanian economy recorded a GDP growth of 3.5% (in nominal GDP reached 631.1 billion RON) and it was the best result in the EU. This is the best result of the country in recent 5 years. GDP growth in previous years amounted to 2.2% in 2011 and 0.7% in 2012.

Verified data of the Romanian Statistics Institute shows that, at the end of 2013, a long-awaited recovery in domestic demand was recorded as well. The official forecast and prediction of the EC and the IMF assume the GDP growth in 2014 by 2.2%, according to coalition politics, the key factors of the pro-growth will be the capital expenditures from the State budget, the higher rate of absorption of the EU funds (in February of 2014 - 34%) and consequently, the increased internal consumption demand and exports. According to the World Bank estimates, the economic growth of Romania in 2014 will be around 2.5%.

The forecasts of the European Commission assume the growth rate at 2.5% in 2014 and 2.6% in 2015, compared to 3.5% in 2013. The balance of risks for growth seems to be negative. The biggest threats are: greater than expected impact of deleveraging on the household consumption and investment spending, high base effect in agricultural and industrial production and the possible lack of further improvement of situation in the euro zone.

Forecasts of independent centers and banks vary in the range of 2.3-2.5% (some banks announced upward revision of its forecasts - up to 3%). Experts agree that economic growth depends on structural reforms, the absorption of EU funds, the results of the export industries and other external factors. After the threat represented by the largest financial institutions pay attention to the decline in lending (despite the steady increase in the value of deposits in Romanian banks, also is the effect of limiting the transfer to the Romanian subsidiaries of European banks), the level of the problematic loans (both in the corporate and individuals), and a high percentage of the insolvency of enterprises.

Romanian foreign trade in 2013 reached 104.8 billion and was by 5.1% higher compared to the 2012 year and 4.6% higher than the previous record result, reported in 2011 (100.2 billion). Romanian exports in 2013 amounted to 49.6 billion, an increase of 10% compared with the previous year and the highest score in history. During the year, exports to EU countries increased by 8.8% compared to 2012, and to the countries which are not members of the EU by 12.8%. Romania's most important partners in terms of export in 2013 were: Germany, Italy, France and Turkey. Romania also had an increase in import by 1.0%, totaling 55.2 billion in 2013. This value is about 6% higher than the value of the Romanian imports in 2012. An important factor contributing to the economic growth of Romania in 2013 was primarily industrial production, which increased by 7.1% and growth in the manufacturing sector by 8.5%, as well as in the mining industry and the mining sector by 1.9%. In 2013, electricity production in Romania fell by 3.2% due to lower heat production by 18.5%. However, there has been an increase in production of hydropower by 23.9%, nuclear 1.3%, and wind 77.8%. Electricity consumption fell by 6.0%. The closure of the financial year in 2013 ended with a deficit of 3.6 billion euros. Foreign direct investment in 2013 amounted to 2,713 billion. Inflation in 2013 was at 1.55%, while the unemployment rate was 7.1%.

"Third row" V. Ponty took special disposal of exemption from taxation of reinvested profits of enterprises (estimated impact on budget revenues - 137.5 million RON in 2014). According to the document, the exemption from CIT got into force from 1 June 2014 (by the end of 2016) and a part of the profits was allocated by the company to investment in technological equipment, machinery and installations. The Romanian government also approved a new mechanism for the de-minimis aid to the companies forming minimum 20 new jobs, in April 2014 – the state will pay a certain part of the cost of newly created jobs by funding the salaries of their employees (up to a maximum national average for a period of two years).

The 7-year budget allocated for this purpose 2.7 billion RON. Ministry of Public Finance announced simplification of the tax system, the first step should be the elimination of 70 taxes and fees (the proceeds of which do not exceed 100 thousand. RON separately and have little value for the budget - a total of 1.9 million RON). In the 7-year budget, 2.7 billion RON was allocated for this purpose. Ministry of Public Finance announced the simplification of the tax system, the first step should be the elimination of 70 taxes and fees (from incomes of those not exceeding 100 000 RON separately and have little value for the budget - a total of 1.9 million RON). Still, 5% reduction of the burden employers was announced, in respect to the social security contributions (currently amount of the substantial total pension contribution is 31.3% of gross salary, the employer pays 20.8% of the base), based on the outcome of talks with the IMF and the European Commission.[1]

Pont's cabinet conducted increases in the level of the minimum wage (up to 850 RON, another hike - about 50 RON in June 2014). In 2014, Romanian government has set a new target - the date of adoption of the euro: Prime Minister Ponta announced that the government goal is the accession to the euro zone in 2019, the year in which Romania will hold the presidency of the EU.



[1] Polish Republic Embassy in Bucharest