Macroeconomy posted a certain improvement, but Romania has been losing ground in the EU accession race, as it posted a decrease in the GDP rate per capita over the past five years, expressed by the Purchase Power Parity, as compared to the European Union countries.
The absence of functional market economy has mainly affected the private sector development. Cumulated direct investments per capita maintain a low level. Most prices have been liberalised in Romania, but certain attempts at controlling the prices tend to create distortions that can affect the economy.
The private sector is still underdeveloped, while state-owned enterprises hold a significant weight in economic activity.
The legal framework for the market economy has been settled, but institutions needed to implement or track it are either too weak or they have not been established yet. The Government has used its scarce resources to support some state-owned enterprises, disfavouring the private sector.
The openness degree of Romanian economy has increased, following the recent performances posted by exports. In the energy field, the power price is still not set by the market, it does not reflect production costs, while the financial situation of public utilities has worsened. The natural gas price has been badly affected.
No progress was made in industrial pollution control and risk management in the field. Romania attained medium-term priorities regarding nuclear safety, but failed to meet other energy policy issues.
The securities market is still in a rudimentary development stage. The money policy has not focused on price stability. The inflation rate remains high, although it is on the decrease.
Foreign vulnerability indicators posted an improvement. Romania has made progress in the fiscal field over the past year, mainly regarding excises and indirect taxes.
The banking system moved away from loss-making practices visible last year, state-owned banks were “cleaned” from bad credits, the largest state bank – BCR – is profitable, CEC is now the biggest problem of the state banking sector.
The financial system is very little developed and is not able yet to secure appropriate ties between investors and depositors.
The administrative capacity of the Agriculture Ministry is low, prompting the need for urgent measures regarding the community acquis.
The market cannot be monitored, while the control of food quality does not meet European standards. Certain progress has been made in clarifying ownership rights over lands.
Romania spends little money for education and does not have the necessary resources for investing in the field.