Romania
Elizabeth Cotora
Overall Score: 66.6 World Rank: #57
Romania Quick Facts
- Population:
-21.3 million
- GDP (PPP):
-$285.1 billion
-3.5% growth
-0.3% 5-year compound annual growth
-$13,396 per capita
- Unemployment:
-7.4%
- Inflation (CPI):
-4.0%
- FDI Inflow:
-$3.6 billion
Legal System
Romania is part of the European Union, which is elected every five years.
Competitive Markets
Limits on Government Regulation
Government regulations limiting the budgetary deficit and public debt are new in the Romanian legal system. This started in 2010 and it was more of an attempt to restore finances. Most of these rules were included in the legislation system. Since 2009, Romania has granted loans in order to prevent the negative effects of the global financial
crisis. Every government obviously has limits on certain things.
An Efficient Capital Market
The Romanian capital market has grown in the last decade. There was a fluctuation in money, known as "leu". 1 Leu equals .24 American cents. For most of the stocks, the "random walk hypothesis" can't be rejected. Because of this, there aren't enough reasons to reject the Efficient Market Hypothesis and actually go against it.
Monetary Stability
Low Tax Rates
In Romania, the Personal Income Tax Rate is a tax taken from people and is established on different sources of income like labor, interest, etc. The Personal Income Tax Rate in Romania is 56.50%. It averaged about 43.70% from 1995 until 2014, reaching an all time high of 56.50% in 2013 and a record low of 40 percent in 1996.
http://www.tradingeconomics.com/romania/personal-income-tax-rate
Free Trade
Free Trade Zones (FTZ's) are made by the National Agency of Free Trade Zones. Romania has six FTZs, all located in ports but one - the Arad-Curtici FTZ. Because of its location, this could become one of the most attractive for investors. Romania's largest trading partner was Germany and for many years, it still was.
Romania's main exports to Germany were insulated wire, and cars parts.