Dan Pălăngean
Dan Pălăngean
Senior Expert, National Bank of Romania
Romania’s Recovery According to the World Bank

Romania’s Recovery According to the World Bank

The data included in the autumn report of the World Bank, “COVID-19 and Human Capital”, which brings the forecast for Europe and Central Asia countries up to date shows the skepticism of this institution’s specialists regarding a rapid recovery of the Romanian economy, by reference to official estimates issued locally. Thus, the National Commission forecasted an economic decrease of -3.8% this year, followed by a recovery of 4.9%, which would bring GDP level in 2021 to + 0.9% above that registered in 2019.  More


The Effect of Brexit on Romanian Foreign Trade

The Effect of Brexit on Romanian Foreign Trade

Over the last few years, the United Kingdom has been Romania’s most important foreign trade partner with whom we have managed to record a significant trade surplus. The island economy’s exit from the community bloc and the establishment of barriers in the trading of goods, even non-tariff barriers (the granting of zero customs duties was finally recorded during negotiations), will affect the trade balance of our country.  More


Long-Term Interest Rate Fell Below 3%

Long-Term Interest Rate Fell Below 3%

Long-term interest rates for Romania fell by almost one percentage point in just two months, according to data released by Eurostat. After increasing up to 4.83% in April 2020, at the end of June it reached a level below the threshold of four percentage points (3.89%). Beyond the obvious effects on future budget payments, this indicator is critical for convergence purposes and the adoption of the euro.  More


Remarks on the 2020 Romanian GDP Estimate – Reduced for the 3rd Time in the Official Forecast

Remarks on the 2020 Romanian GDP Estimate – Reduced for the 3rd Time in the Official Forecast

The GDP 2020 estimate has been reduced for the third time in a row in the so-called Preliminary Autumn Forecast for the budget amendment published by the specialty National Commission. From an economic result of RON 1,141.4 billion according to the estimate issued in February, we went to RON 1,082.1 billion in April’s estimate, to RON 1,058.0 billion in August and now we reached RON 1,050.5 billion.  More


The 2020 GDP of Romania

The 2020 GDP of Romania

The National Institute of Statistics confirmed the signal result of the economic growth for 2020 at the level of -3.9%, in the first preliminary version made public. The nominal value resulting from the overall calculation for the last year was RON 1,053,881.4 million, above the recent forecast and almost identical to that of 2019 (RON 1,053,884.8 million). However, it was lower in euro by about 4.22 billion, due to the increase in the average annual exchange rate (from 4.7452 RON/euro to 4.8371 RON/euro). The result – redistributed between quarters. Beware of base effect! More


Taxation of Wage Earnings for Pension Purposes in Romania, since 1950

Taxation of Wage Earnings for Pension Purposes in Romania, since 1950

The income tax has increased about four times in Romania since 1950, according to data published by the National Institute of Statistics (INS). The evolution of gross and net earnings shows that we have reached a doubling compared to the period before the political regime change, which occurred in 1989 (see data presented in extenso and centralized by decades in the table below).  More


Romania’s Public Debt Relative to GDP – Implications

Romania’s Public Debt Relative to GDP – Implications

The public debt officially measured by the Romanian Ministry of Finance based on the European methodology advanced, in July 2020 alone, almost as much as in the whole second quarter, when Romania was caught in the middle of the pandemic-induced crisis shock and the quarterly GDP decreased by 12.3% compared to the previous quarter. The explanation for the relative increase as a public debt share of GDP (2.1 percentage points in Q2 and 2 pp in just one month, July 2020) is not limited to the increase by about 40% of the additional monthly borrowed amounts (RON 13.5 billion compared to the monthly average of 9.7 billion in full pandemic), but also in the reduction of the reporting base by over RON 20 billion (approx. EUR 4.1 billion) as a result of the methodology used.  More


The COVID Crisis and the 2nd Pillar of the Romanian Pension System

The COVID Crisis and the 2nd Pillar of the Romanian Pension System

Far from the public attention, the value of the assets held in the seven private funds that manage the pension money in Pillar II for seven and a half million future pensioners decreased dramatically in the second part of February and continued to decline during March, with the minimum being reached on the 18th of March 2020. More


The Effects of the Coronavirus on the Labor Markets in the EU

The Effects of the Coronavirus on the Labor Markets in the EU

Romania was among the least affected EU Member States in Q2 2020 in terms of temporary layoffs, reduced working hours or job losses, according to the analysis published by Eurostat. The consequences of Covid19 pandemic varied significantly from one country to another, the most affected being Spain, Italy, Cyprus, Ireland and Greece.  More


The Romanian Leu, Koruna, Zloty and Forint in Pandemic: A Comparison in Terms of Stability and Its Effects

The Romanian Leu, Koruna, Zloty and Forint in Pandemic: A Comparison in Terms of Stability and Its Effects

The Romanian leu was much more stable during the pandemic than the currencies of Central European countries with a similar exchange rate regime – the Czech Republic, Poland and Hungary. Data published by the National Bank of Romania shows a much lower devaluation of our national currency against the euro, of only 1.95% between January and October, well below the levels ​​recorded by Czech koruna (-7.38%), Polish zloty (-6.44%) or Hungarian forint (-7.78%). More


Romania’s Loss of Competitiveness Compared to Hungary and Poland

Romania’s Loss of Competitiveness Compared to Hungary and Poland

Romania has improved its competitiveness compared to the Czech Republic and Bulgaria at the regional level in recent years but lost ground compared to Croatia, Poland and Hungary, according to data released by Eurostat. With an index calculated at 96.77 (2010 = 100), we were slightly better than our neighbor from the South of the Danube (97.32), with the note that a lower value shows an improvement in competitiveness.  More


More than a Fifth of Romanians Are Employed by Multinationals

More than a Fifth of Romanians Are Employed by Multinationals

Germany (16.6%), France (12.4%) and Italy (9.2%) are the countries that hold the largest share in the Romanian economy by the number of employees operating in 80,591 groups of enterprises, according to the data processed and published by the National Institute of Statistics (INS) for 2018. Together with the USA (8.3%) and the Netherlands (7.6%), they control most of the existing enterprise groups in Romania.  More


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OEconomica No. 1, 2016