Romania Basic Information

According to Destination Explorer, Romania is a semi-presidential republic and has a bicameral parliamentary system. The Senate (upper chamber) has 136 seats and the Chamber of Deputies (lower chamber) 330. Both chambers are elected directly, for a four-year term, from 43 multi-member constituencies comprising 41 regions + the Bucharest capital district and the diaspora district. The head of state is the president, currently Klaus Iohannis. As of November 2021, the country is governed by the so-called grand coalition consisting of the Social Democratic Party (PSD), the National Liberal Party (PNL) and the Democratic Union of Hungarians in Romania (UDMR). The government is also traditionally supported by 18 MPs elected for national minorities. The coalition has a clear supermajority in both chambers of parliament. The National Bank of Romania (the central bank) will regulate the fluctuations of the Romanian currency, and although Romania should have no problems financing its deficits, they pose a risk to currency stability. In the past, Romanian government institutions did not meet EU standards and were monitored under the Cooperation and Verification Mechanism. In foreign relations, trade and security relations with the EU and the US will not change significantly, Romania will continue to benefit from close relations with the US. From 2019 or 2020 is the European top prosecutor of the European Public Prosecutor’s Office, Romanian Laura Codruţa Kövesi. Romania is a country with significant growth potential, based on the process of economic convergence and technology diffusion. However, the long-term outlook is complex. The quality of Romanian institutions remains at a relatively low level, even taking into account the ongoing changes. The regulatory environment remains insufficient, although the adoption of EU laws and directives is contributing to gradual progress. The demographics are unfavorable, the working-age population will decline substantially, and there is an adverse relationship between overall population growth and the working-age population (the latter is declining faster). The country continues to have large social disparities between regions and between urban and rural areas, and it also ranks high in poverty. The competitiveness of the economy is still based on low costs and wages. The labor market is gradually becoming less available here as well, and a shortage of qualified labor is starting to appear, especially in areas with a higher concentration of investments. The government’s plans for economic recovery rely on green transformation in transport and the fight against climate change, public services, urban development, cultural heritage restoration, and above all on economic competitiveness, resilience and digitalisation. Romania is one of the largest trading partners of the Czech Republic in the region of South-Eastern Europe, which is due not only to the political, economic and trade ties between the two states, but also to the considerable potential of the Romanian market and the relative geographical proximity of the two countries. Romania emerged from the pandemic in 2020 with a drop in GDP of 3.9% and increased unemployment, which rose by 6.1% year-on-year. In 2021, Romania grew by 6.5%, the highest year-on-year rate in recent years. The latest forecasts point to a rather positive, albeit moderate, growth outlook, especially in services, retail, construction and industry. Overall, real GDP should grow by 4.4% in 2022 and 4.2% in 2023. With Russian aggression in Ukraine, data prediction is very difficult. The pandemic in 2020 greatly affected mutual exchange, year-on-year declines from April to August exceeded 20%. Towards the end of the year, the situation began to straighten out, and 2020 ended with a year-long drop in exports of “only” 2%, in imports by approx. 11.5%, the positive balance increased again. According to the preliminary data for the year 2021, last March and April started a great dynamic, and mutual turnover exceeded the threshold of EUR 5 billion in 2021, exports almost EUR billion. The commodity structure of mutual trade as well as key sectors remains unchanged for a longer period of time.