In 2020, there was a 3.9% decrease in GDP compared to 2019, and in nominal terms it was €222 billion. In the last quarter of 2020, Romania recorded the lowest quarterly GDP decline among European Union member states (-4.8%), which led, for example, the International Monetary Fund to upgrade Romania’s outlook for 2021.
The Romanian government expects nominal GDP growth of 4.3% for 2021. Romania’s budget deficit increased by RON 12.26 billion (EUR 2.62 billion, i.e. 1.14% of annual GDP) in February 2021, compared to 0.33% of GDP in January 2021.
The government explains the increase by saying that it spent 4.18 billion RON, or 0.37% of GDP, to mitigate the effects of the crisis. Budget revenues in February increased by 4.1% year-on-year to RON 5billion (EUR 8.9 billion), and tax revenues were 2.3% higher than last year (RON 2billion).
The government plans a budget deficit of 7.16% of GDP for 2021. Government debt rose by more than RON 5 billion (€1 billion) to RON 50billion (€10billion) in January. The debt-to-GDP ratio increased slightly by another 0.5% to 47.8% at the end of January 2021.
Romanian exports decreased by 1.1% year-on-year to EUR 6.26 billion in October 2020. The European Commission expects Romania’s trade deficit to reach 8.8% of GDP in 2020 and increase to 10.1% in 2021.
The World Bank expects GDP growth of 4.3% in 2021 and 4.1% for 2022. These are significant changes, as the bank originally predicted only 3.5% GDP growth. The International Monetary Fund expects 6% GDP growth in 2021 (according to this projection, Romania’s growth would be the second highest after Spain, at 6.4%).
Post-COVID-19 opportunities for foreign exporters
The government’s plans for economic recovery rely on a green transformation in transport and the fight against climate change, in public services, urban development, the restoration of cultural heritage, and above all in economic competitiveness, resilience and digitalisation.
The health crisis brings a whole range of opportunities, even in view of the massive investment priorities, or the reforms that Romania will adopt to overcome the current crisis with the help of the EU financial instrument of the National Recovery and Resilience Plan. In the defense sector, the government adheres to the commitment of 2% of GDP, and defense is one of the strategic pillars.
In this context, a wide field of action for Czech economic entities is offered.
Transport industry and infrastructure
According to allcountrylist, the National Recovery and Resilience Plan envisages sustainable transport as part of the so-called I. investment pillar with a total amount of approximately EUR 2billion.
For Czech companies in this sector, for example, the production and supply of construction materials and technologies, machines and equipment in the field, construction raw materials and materials and construction technology of buildings, electrical installation materials, cabling for transport routes, production and supply of transport technology and related technologies for gradual construction of railway corridors, construction mechanization, machinery and technology (excavators, loaders, ground milling equipment, stone crushers, etc.), reinforced concrete and bridge structures (including wooden structures), industrial and technical equipment of construction sites, delivery of construction work or construction supervision as required investor etc.
The National Recovery and Resilience Plan envisages ICT as part of the so-called III. investment pillar, the total amount of which is approx. 5.08 billion. It is estimated that by 2025 the ICT sector will contribute 12% to GDP.
For Czech companies, for example, the possibilities of supplying technologies, specialized software for managing industrial operations and call centers, the supply of SW solutions for the protection of company data, the possibility of supplying technologies, or specialized SW for the management of industrial operations and call centers, supply of SW solutions for the protection of company data, there is also a growing trend in the field of smart technologies.
Romania spends 2% of GDP on defense. For example, participation in rearmament, airport equipment, special material, medical supplies can be promising for Czech companies.
Healthcare and pharmaceutical industry
The National Recovery and Resilience Plan provides for the development and modernization of the health infrastructure within the so-called II. investment pillar, the total amount of which is approximately EUR billion.
For Czech companies, there are prerequisites for the production and export of: medical devices and equipment, medical equipment, aids and equipment for medical workplaces, including specific supplies of, for example, protective equipment in the context of the situation caused by the covid-19 pandemic and the solution to its consequences. Modern parapharmaceuticals, over-the-counter food supplements and consumables are in general demand on the market.
Agricultural and food industry
The national recovery and resilience plan includes this segment as part of the so-called first investment pillar, the total amount of which is approximately EUR 2billion. In 2019, Romania’s share of total EU agricultural production was just over 4.5%. Romania is thus the seventh largest producer in the field of agriculture, behind France, Germany, Italy, Spain, the Netherlands and Poland. Even in 2020, Romania remained in first place within the European Union in the total production of sunflower and sunflower-cultivated land.
For example, food products (frozen, chilled and canned products, oils, fruits and vegetables, confectionery, seasoning mixes, etc.), healthy nutrition (cereals, diet and vegetarian products, products without lactose and gluten), technology for processing industry (meat processing plants, bakeries, dairies, canneries, fish processors, cold stores and freezers, etc.), supplies of bakery machines, beverage lines and other technologies for processing and food businesses, production and supply of agricultural machinery and other technical equipment for farms and agricultural operations, including related spare parts, production and supply of fertilizers, greenhouses, seedlings and seeds, and other technical equipment for plant operations, production and supply of irrigation technologies, pumps and related spare parts.
In particular, tractors and agricultural attachments are imported to Romania. Tenders appear in the field of equipment for pig houses, poultry houses and irrigation technologies, etc.