EU economy slowdown to affect Romania

Romania and Bulgaria, which are lagging behind in economic classifications of Central and Eastern Europe, are still largely relying on the intensive capital and labour exports.

Analysts of the Economist Intelligence Unit (EIU), a division of The Economist group, consider that this situation triggers high exposure to the short-term effects of EU economies’ slowdown. EIU says that even the most developed economies in this region, such as Hungary for instance, are vulnerable to a drop in foreign demand.

The latest statistics highlighted concerns regarding possible economic slowdown in Germany, the main export market for Central and Eastern European countries. However, the ten EU candidate countries reported that their exports to Germany rose by 15-20% over the first half of this year.

EIU analysts say that a possible explanation for this situation is the important share won by Central European countries on the EU market.

Last year’s statistics confirm that Romanian exports are increasingly relying on the EU economies, as these absorb 62% of Romania’s commodities offer. Germany holds a 17.1% share as an outlet for the Romanian commodities export.

The Czech Republic, which exports 40% of its commodities on this market, Poland, with 39.9% and Hungary, with more than 37%, seem to be more dependent on the German economy. However, the share of the German economy in these countries’ exports registered a slight decrease in 2000, to the benefit of Italy, France and Great Britain.

EIU estimates that EU economic growth will stand at 2% this year, against 3.4% last year. However, forecasts do not point to an extended slowdown, as economic growth is expected to resume in 2002, reaching 2.5%.