Romania Economy Profile 2012

Economic activity has stabilized and are expected to grow by 1 ½ -2% in 2011 (against about -2% for 2010). Inflation has surged in recent months due to the effects of the necessary increase in July of VAT and pressure on food prices. Inflation expected to peak at just over 8% in late 2010 before returning in the National Bank of Romania's target range during the year 2011.Un current account deficit of 5-6 % of GDP for 2010.

Difficult steps but nécessairesont tax was taken earlier this year to reduce fiscal imbalances and Romania to help ensure macroeconomic stability, and should be sufficient to ensure that the budget deficit target of 2010 (6, 8% of GDP) is reached. However, spending pressures - particularly in health programs and social assistance - must still be addressed, and improvements in tax collection remains a challenge that we have agreed with the government on key components of a 2011 budget that should produce a deficit of 4.4 % of GDP. (In cash terms).

An action plan on key structural reforms, including the approval of the new law and public promulgation of the law on pensions has been agreed.
The banking system continues to weather the economic crisis with varying degrees of success and banks remain well capitalized and liquid. The capital adequacy ratio at end September was 14.6 % and all banks exceeded 11 % (ratio requirement is 8 %). Non-performing loans are increasing and cause losses, but there are enough buffers in place to cushion the impact. We agreed that improvements in consumer protection are needed in the banking sector, but that actions in this area must comply with EU directives and not endanger the stability of banks. "

Manufacturing

About 40 % of Romania's work force is usually employed in manufacturing industries. Petroleum refining and metallurgy are among the chief industries and produce important export commodities. To supply these industries, substantial quantities of crude petroleum, metals, and other raw materials are imported. Other major industrial activities that produce key exports are the making of machinery, construction materials, and chemicals. The processing of food and timber and the making of textiles and clothing are activities of long-standing importance. Factories and mills are found in or near the major cities, particularly Bucharest, Brasov, Timisoara, Arad, Galati, and Iasi.