Pan-European study forecasts a 4.3 economic growth for Romania in three years

Pan-European study forecasts a 4.3 economic growth for Romania in three years

 

By Daniel Stroe – Bucharest

Romania’s economy will have a slight growth this year, but then is expected to reach an increase between 2.7 and 4.3 per cent by 2016, concludes a study done in 14 countries by the German market research company GfK.

“For 2013, all experts are anticipating a slight revival in the so far extremely weak Romanian economy. The forecasts for this improvement vary from 1.6 percent to 2.0 percent. Between 2014 and 2016, the Romanian economy is expected to see growth of between 2.7 percent and 4.3 percent. According to current estimates, GDP rose by 0.5 percent in the second quarter. The overall economic framework conditions are favorable: national debt is at around 34 percent, the budget deficit is around 2.5 percent and unemployment is in the region of 7 percent” reads the report.

Despite this, GfK’s experts point out Romania still needs a number of reforms in order to be able to keep pace with other European countries on a lasting basis. “A great many companies are still owned by the state. Hopes for further privatization were dashed again and again in the chemical, mining and transport industries, in particular. There are also still problems with regard to the judicial system and the black market. Invitations to bid very often feature irregularities and the Romanian government must improve its very poor payment behavior in some areas” they warn.

The report notices though private consumption is playing an increasingly important role in Romania while the real income is rising. In central Romania, for example, some areas have virtually zero unemployment, it underlines.

At the same time, the additional weak area of professional training was recently reformed. Since 1989, the country had barely invested in this area, but now there is a new legislation, on the basis of which professional qualifications can be completely rebuilt, the experts observe.

This relates to practical qualifications, which aim to meet the demand of local labor markets by working in close collaboration with business and state institutions. The aim is to guarantee the availability of qualified professionals and at the same time offer young people good career prospects. This is a key step, particularly in view of high youth unemployment, it concludes.