The World Bank Office, Romania
ROMANIA WEEKLY UPDATE
Monday September 27, 2004
The material published in this newsletter is compiled by the World Bank's Bucharest office and staff in Washington, and on the basis of publicly available information. It does not
represent the opinion of the World Bank or any other official body. No responsibility for factual accuracy can be taken
Gross Domestic Product – first semester of 2004
EU accession – two more chapters closed
The Gross Domestic Product estimated for the first
semester of 2004 amounted to ROL 907,871.1 bn.
(current prices), increasing – in real terms – by 6.6%
as against the first semester of 2003. The growth was
significantly driven by higher activity volumes and,
consequently, by higher gross value added in industry
(+5.9%), construction (+8.6%) and services (+6.5%),
whose contribution to the Gross Domestic Product
was 83.9%.
Romania completed two more acquis chapters for EU
accession, bringing the total number to 27 out of 30
policy topics. The chapters closed are Movement of
Services and Regional Policy. Among the remaining
three open chapters are: Justice and Home Affairs,
Competition (including State Aid), and Environment.
The Environment chapter is also at an advanced stage
of negotiation, but more detailed plans must be drafted
prior to provisional closing. Romania hopes to close
the accession talks this year and sign the Accession
Treaty early next year in order to join the Union at the
beginning of 2007. Romania is still waiting for the
functioning market economy tag from Brussels this
October.
Agriculture
Industry
Construction
Services
Indirectly measured fin.
intermediation services
Gross value added
Net taxes on product
Gross Domestic Product
Total final consumption
Households
Government
Gross capital formation
Gross fix capital formation
Net export goods services
Export goods services
Import goods services
ROL bn.
curr. prices
1st sem. 04
50,774.5
287,766.0
42,722.8
431,114.9
In % against
the 1st
semester 03
105.3
105.9
108.6
106.5
-8,923.7
104.1
803,454.5
104,416.6
907,871.1
803,914.4
745,655.5
58,258.9
190,174.6
188,879.6
-86,217.9
418,607.5
504,825.4
106.3
108.8
106.6
108.8
109.0
106.0
110.4
117.1
119.1
Total final consumption registered a growth of 8.8%
in the first semester of 2004 in comparison with the
same period of 2003; while the final consumption of
households increased by 9.0%. Gross fixed capital
formation registered a growth by 10.4 percentage
points. The investment rate, as a ratio to gross value
added per economy, was 23.5% in the first semester of
2004 (22.3 % in the same period of 2003). Additional
information can be found at http://www.insse.ro/
IMF - completion of first quarterly review
The IMF Executive Board has completed the first
quarterly review of the 2-year stand-by agreement
with Romania which started in July. The Romanian
authorities have not drawn funds so far and intend to
continue treating the arrangement as precautionary.
The IMF has approved the waiver requested by the
Romanian authorities regarding the non-observance of
ceilings for private enterprises arrears to the state
budget and social security funds as of the end of June.
The IMF praises the government's policy of tightening
the fiscal stance in response to growing domestic
demand, while it calls for cautious monitoring of the
tax reform next year, including the proposed tax rate
cuts.
Foreign trade – January-July 2004
In July 2004, exports amounted to EUR 1,829.7 mn.
and represent the highest monthly value registered
since 1990. Exports FOB during January - July 2004
amounted to EUR 10,843.8 mn., by 20.6% more than
during the similar period of 2003.
In the structure of exports by goods, five sections hold
69.9% of total exports: clothing and textiles,
machinery and mechanical devices, metallurgical
products, minerals (oil, ores, coal), and footwear. In
comparison with the similar period of 2003, exports to
the European Union countries (EU-25) increased by
20.1%, registering a weight of 73.7% in total exports.
Imports CIF, during January 1 – July 31, 2004,
amounted to EUR 14,342.7 mn. (EUR 13,238.6 mn. in
prices FOB), 22.2% more than during the similar
period of 2003. In the structure of imports by goods,
the first five sections, representing 66.7% of total
imports, were: machinery and mechanical devices,
clothing (fabrics, textiles), mineral products (oil and
related products, coal, ores), means of transport and
metallurgical products. In comparison with the similar
period of 2003, imports coming from the European
Union countries (EU-25) increased by 17.6%,
registering a weight of 65.3% in total imports. Imports
CIF in July 2004 amounted to EUR 2,368.0 mn. (EUR
2,185.7 mn. imports FOB), by 23.2% more than in
July 2003.
During January - July 2004, the commercial deficit
FOB/CIF amounted to EUR 3,498.9 mn., and in July
2004 it was EUR 538.3 mn. In prices FOB/FOB, the
deficit was EUR 2,394.8 mn. during January-July
2004 and EUR 356.0 mn. in July 2004.
The National Bank of Romania exchange rate at the
end of July 2004 was ROL 41,088 / EUR (-0.1% as
against the end of 2003) and ROL 34,104 / USD
(+4.6% as against the end of 2003).
NBR reference interest rate
Aug-04
Jul-04
Jun-04
May-04
Apr-04
Mar-04
Feb-04
20.29
20.75
21.25
21.25
21.25
21.25
21.25
The reference rate of the
NBR is 19.24 percent per
year in September 2004.
(See attached the evolution
of the reference rate over
the previous 7 months.)