Bucharest City Report • Q3 2013
Economy/Investment
Economic Climate
Romania turned in a solid economic performance in the first two quarters of 2013. Q2
year-on-year GDP growth was 1.4% while S1 year-on-year GDP growth was 1.8%, one of
the highest in the European Union. This was largely due to the combination of strong
growth in industrial production and export, which gained momentum from an accelerating
pace of demand from markets outside of the Eurozone. However, the construction and
retail sectors continued to struggle. In the following quarters, agriculture is expected to
further support economic growth, which is forecasted by various financial institutions at
around 2% for 2013.
Inflation has come down significantly over the last quarter. The annual inflation rate,
measured by HICPs, stood at 1.1% in September, a level which was similar to the one
registered for the Euro area. This allowed the National Bank of Romania to further cut the
monetary policy rate on the 1st of October to an historic low of 4.25% (from 5.25% in
June). It is also expected that the bank will act again before the end of the year. The move
resulted in lower borrowing costs in local currency.
The exchange rate was fairly stable during Q3, oscillating between
4.38 and 4.48 ron for 1 euro.
Government debt is 38.6% of GDP, the fourth lowest in the European Union after Estonia,
Bulgaria and Luxembourg, while the government deficit is foreseen at 2.6% of GDP for
