The Romania Business Forecast Report provides essential macroeconomic, political and financial analysis for companies doing business in Romania. The Romania Business Forecast Report helps businesses with Romanian market assessment, strategic planning and decision making to promote growth and profitability in Romania and is an essential tool for CEOs, Chairmen, Finance Directors/CFOs, Managing Directors, Marketing/Sales Directors with commercial interests in this emerging market.

An influential new analysis of Romania's political, economic and financial prospects through end-, just published by award-winning forecasters, Business Monitor International.

Key Uses of the Romania Business Forecast Report | Romania Political Outlook | Romania Economic Outlook | Romania Business Environment | Key Romania Industry Sectors | Romania's BMI Executive Summary | Our Europe Business Forecast Report Subscribers

Key Uses

• Forecast the pace and stability of Romania's economic and industry growth through end-
• Identify and evaluate adverse political and economic trends in Romania, to facilitate risk mitigation strategies
• Assess critical shortcomings of Romania's business environment that pose hidden barriers and costs to corporate profitability
• Contextualise Romania's country risks against Europe regional peers using BMI's country comparative risk ratings system
• Target business opportunities in Romania's high-growth industry sectors
• Evaluate external threats to doing business in Romania, including currency volatility, the commodity price boom and protectionist policies

The Romania Business Forecast Report by Business Monitor International includes four major sections: Romania's Political Outlook, Romania's Economic Outlook, Romania's Business Environment and Romania's Key Industry Sectors.

Romania's Political Outlook:

What are the political risks to doing business in Romania over the next 10 years?

BMI's Romania Country Risk Ratings evaluate the short and medium-term threats posed by government instability, adverse economic policy-making, deterioration in the business environment and external shocks.

Romania Political Outlook Contents

• SWOT Analysis for the Romanian Market
  Political Strengths, Weaknesses, Opportunities and Threats facing Romania.
• Political Stability and Risk Assessment for Romania
  BMI's Risk Ratings assess explicit short and long-term risks to political stability; latest ratings, rankings and trends for Romania's risk are compared with Europe regional and global averages.
• Current Administration and Policy-making in Romania
  BMI profiles key policy-makers and power-brokers in the Romanian government, assessing threats to the continuity of Romanian economic policy, and likely changes to the business operating environment through end-.
• Romanian Foreign Policy
  BMI examines key trends and shifts in Romania's foreign relations and alignments with Europe neighbours, the United States and Europe, focusing on external influences.

Key Benefits

1. Benchmark Romania's risk profile against its neighbours, the global and regional average, allowing easy comparison of risks between key business markets.
2. Identify, evaluate and anticipate political and security risks to the business environment in Romania, and to your company's current operations and future plans.
3. Gain valuable insights into the Romanian government and policy-making, through BMI's specialist team of analysts and economists, and their exclusive network of private and public sector sources.

Romania's Economic Outlook:

How will Romanian economic policy-making and performance impact corporate profitability over 2009-18?

BMI provides our fully independent 10-year forecasts for Romania through end- for more than 35 macroeconomic variables. We evaluate Romanian growth, and also forecast the impact of economic management, including central bank policy, on profitability.

Romania Economic Outlook Contents

The Romania Business Forecast Report features explicit BMI economic forecasts for Romania, with supporting commentary and analysis, for end-2014, 2015, 2016, 2017 and 2018 set against Romanian government views. Underpinning our Romania forecasts are key assumptions for the global economy through end-, covering growth, inflation, employment, trade and investment, interest and exchange rates in the US, Japan and the Euro-zone.

Coverage of Key Economic Issues in Romania

• Economic Activity in Romania
  Real GDP growth; industrial growth; employment growth; inflation and consumer prices; consumption (indicative wages, retail sales, consumer confidence)
• Fiscal Policy in Romania
  Current macroeconomic strategy and implementation policies; government finance (revenue, expenditure, budget balance); tax reforms
• Monetary Policy in Romania
  Interest rate trends (bank lending and deposit rates); inflation (retail price inflation, consumer price inflation); exchange rate policy in Romania; Romanian currency controls; influence of foreign direct investment inflows; exchange rates and foreign exchange reserves
• Balance of Payments in Romania
  Merchandise trade (exports, imports, trade balance); current account balance
• Foreign Direct Investment in Romania
  Foreign direct investment approvals and inflows; the foreign investment climate
• Romanian External Debt
  Debt profile (short- and long-term debt; public and private sector exposure)

Key Benefits

1. Rely upon BMI's 100% independent Forecast Scenarios for Romania and underlying assumptions - we take no advertising and are privately-owned.
2. Exploit the benefits of BMI's comprehensive and reliable macroeconomic Romania database, sourced and fully maintained by BMI from an extensive network of private sector, government and multilateral contacts.
3. Gain key insights into the current and future direction of Romanian government economic policy

Romania Business Environment:

How internationally competitive is Romania's regulatory environment, and what changes can be expected?

BMI assesses levels of transparency, flexibility of labour market, tax burden, development of the banking sector and credit availability, infrastructure and IT,foreign investment regime and trade liberalisation in Romania.

Romania Business Environment Contents

• Romania's Business Environment Risk Rating with SWOT Analysis
  Short and long-term business environment risk ratings for Romania, benchmarked against ratings for Europe neighbouring countries.
• Country Competitiveness for Romania
  Competitiveness of Romania's business operating environment in supporting corporate growth and profitability over the 10-year forecast horizon, compared with regional neighbours.

Coverage of Key Business Environment Issues in Romania's Domestic Environment

• Transparency, cronyism and corruption; labour market flexibility; corporate tax burden; interest rate levels; access of private sector to lines of credit; sophistication of banking sector and stock market; levels of business confidence; infrastructure and IT
• Foreign Direct Investment in Romania
  Analysis of foreign investment regime, foreign ownership laws; attractiveness of business environment to foreign investors; review of major foreign direct investments over the last 24 months, and of strategic sectors attracting most interest
• Foreign Trade with Romania
  Analysis of trading environment, government trade policy, liberalisation measures, tariffs and membership of trade areas

Romania's Key Industry Sectors

Which industry sectors in Romania will grow fastest, and where are the major investment opportunities in the Romanian market?

BMI targets investment opportunities in Romania's high growth industries, including automotives, food and drink, infrastructure, oil and gas, pharmaceuticals and healthcare, telecommunications and IT.

Romania's Key Industry Sectors Contents

BMI's independent 10-year forecasts to end- and industry trend analyses for Romania's leading industry sectors, including a selection from:

- Automotive - Defence & Security - Food & Drink - Freight Transport - Infrastructure - Oil & Gas - Pharmaceuticals & Healthcare - Telecommunications

Coverage of Romania's Key Industry Sectors - Romanian Market Overview

• Size, value and structure of industry; impact of liberalisation and privatisation on sector performance and prospects; friendliness of business environment
• Latest Developments in Romania
  Review of latest projects, deals, privatisations, mergers and acquisitions, and implications for sector performance; company rankings for national and multinational companies in Romania; main industry players by local sales, employee size, market share and main brands, products and services
• 10-year Industry Forecast for Romania
  Historic dataset (2004-2008) and BMI forecasts through end-, covering headline industry data broken out by sub sector

Key Benefits

1. Target strategic sector-by-sector opportunities in Romania's high growth industries, attracting public expenditure and foreign investment; identify key players and competitors driving growth, investment and business opportunities.
2. Benefit from competitive intelligence on top national and multinational companies operating in Romania's major industry sectors, including analysis of recent trends in sales and market share, company strategies, product launches and latest deals.

Who buys the EuropeBusiness Forecast Reports?

The Romania Business Forecast Report is an essential tool for CEOs, Chairmen, Finance Directors/CFOs, Managing Directors, Marketing/Sales Directors with commercial interests in Romania.

Our Business Forecast Reports are relied upon by corporates, banks, government departments and multinational organisations around the world.

Executive Summary

Chapter 1: Political outlook

SWOT analysis

BMI Political risk ratings

Domestic Politics

Foreign Policy

TABLE: ROMANIAN POLITICAL OVERVIEW

Chapter 2: Economic outlook

SWOT analysis

BMI Economic risk ratings

Economic activity

TABLE: ECONOMIC ACTIVITY

Balance of Payments

TABLE: BALANCE OF PAYMENTS (EURO)

Monetary Policy

TABLE: MONETARY POLICY

Exchange rate Policy

TABLE: EXCHANGE RATE POLICY

Fiscal Policy

TABLE: FISCAL POLICY

Labour market

Chapter 3: 10-Year Forecast

The Romanian Economy To 2018

TABLE: ROMANIA LONG-TERM MACROECONOMIC FORECASTS

Chapter 4: Special report

China

United States

EUROPE

TABLE: BANKS' LEVERAGE RATIOS

TABLE: ASSETS AS % OF HOME COUNTRY GDP

TABLE: ASSETS AS % OF HOME COUNTRY GDP WHEN EUROZONE IS CONSIDERED ‘HOME COUNTRY'

TABLE: EXPOSURE AS % OF TOTAL EXPOSURE TO REGION

TABLE: BANKS' FOREIGN EXPOSURE (US$ MN)

TABLE: EXPOSURE AS % OF NATIONAL GDP

Chapter 5: Business Environment

SWOT analysis

BMI Business Environment risk ratings

Business Environment outlook

TABLE: BMI BUSINESS AND OPERATIONAL RISK RATINGS

Institutions

TABLE: BMI LEGAL FRAMEWORK RATINGS

Infrastructure

Market orientation

TABLE: LABOUR FORCE QUALITY

TABLE: EUROPE, FDI ANNUAL INFLOWS

TABLE: BMI TRADE RATINGS

TABLE: TOP EXPORT DESTINATIONS

Operational risk

Chapter 6: Key Sectors

Pharmaceuticals

TABLE: DRUG EXPENDITURE AND PRESCRIPTION MARKET INDICATORS

Oil & Gas

TABLE: ROMANIA OIL & GAS – HISTORICAL DATA & FORECASTS

Chapter 7: BMI Global Assumptions

Global Outlook

TABLE: GLOBAL ASSUMPTIONS

TABLE: DEVELOPED STATES

TABLE: EMERGING MARKETS

Heading into recession

The sharp slowdown in economic activity in Q408 supports our view that Romania will head into recession in 2009. We project real GDP to contract by 3.2 % in 2009 as both domestic and external demand falters and capital inflows fall. We caution that as the recession begins to bite and real disposable incomes are whittled down, the risk of protests and will rise accordingly. On a more positive note, we expect signs of a recovery to appear in late 2010, as the growth outlook for key trading partners improves and global credit markets gradually thaw. Nevertheless, we caution that over the medium term, trend growth will be at a lower rate than in the past. Indeed, we forecast economic expansion to average 4.2% between 2011-2013, below the 6.1% average rate of GDP growth recorded between 2006-2008.

Romania’s short-term political risk rating (STPR) has fallen further to 58.3 (out of a maximum of 100), the lowest level since the series was initiated, reflecting the significantly elevated political risks through 2009 and 2010. Indeed, as the country heads into recession in 2009, with BMI projecting a 3.2% contraction in real GDP, we expect to see a rise in dissatisfaction amongst the electorate as joblessness increases. Thus, we caution that there is a heightened risk of social unrest, protests and demonstrations in the medium term.

We caution that the resurgence of inflationary pressures in January and February should see the National Bank of Romania (NBR) maintain its key monetary policy rate over coming months. That said, we hold to our view that the NBR will decide to cut rates later in the year, reducing the key rate by a total 150bps to 8.50% at end-2009, as it becomes more concerned with targeting declining growth rather than inflationary pressures. Indeed, economic activity is already showing signs of a sharp slowdown – real GDP growth fell to 2.9% year-on-year (y-o-y) in the final quarter of 2008, from 9.1% in Q3, while industrial production contracted 12.1% in January. Indeed, we caution that as both domestic and external demand continues to weaken, and capital inflows fall as investor risk aversion remains heightened, the NBR will have little choice but to cut rates to ease the cost of borrowing.

The International Court of Justice (ICJ) in The Hague published a ruling on the maritime border between Ukraine and Romania on February 3, bringing an end to a 40-year old dispute between the countries over their respective rights of access to the potentially hydrocarbon-rich western Black Sea. The ruling established a single boundary halfway between the territorial waters of each country that delimits their continental shelves and exclusive economic zones (EEZs). Importantly, it also recognises the rights of Romania over a continental shelf and EEZ of 9,700sq km, nearly 80% of the 12,000sq km it was disputing with Ukraine. Bucharest and Kiev have accepted the ICJ’s decision, which bodes well for their future adherence to the ruling. The resolution of this dispute clears the way for an expansion of oil and gas exploration to begin in the western Black Sea. We believe the ruling has positive implications for the country’s energy security over the long term.

Abbott International, Air Liquide, Akzo Nobel, Alcatel, Alpha Cement Group, Atlas Copco, BASF, British American Tobacco Company, Coca-Cola HBC, Colgate Palmolive Romania, Deloitte & Touche, Ericsson Telecommunications Bulgaria Ltd, Ernst & Young, Exxonmobil Ltd, Heineken Brewery, Hewlett- Packard Slovakia, S.r.o, Indesit Company, Microsoft Software, Novartis Pharma Services Inc, Omnitel, Opus Land Development SA, Provident Financial, Raiffeisen Bank, Robert Bosch Elektronika Kft., Siemens Srl, Xerox Ltd
"BMI's Business Forecast Report has proved to be what we were seeking for our strategic planning process. The most useful sections for our purpose are the Central Economic Forecast and the Key Economic Sectors, which will support my team to update our strategic planning for the next 5 years."
(Chief Operating Officer, PSV Company, Romania.)