William Davidson Institute Working Paper 402
SECOND PART: ROMANIA UNDER SCRUTINY
5. A basic introduction to the Romanian economic context
From a macroeconomic perspective, Romania must solve two major problems before
it can hope to be on the “short-list” of EU applicants. Firstly, it should bring inflation
down radically, close to a one-digit level. With a yearly inflation rate of 40.6% in
1998, of 55% in 1999, and 40.7% in 2000, Romania is far from matching the EU
norm.
Another major problem for Romanian economy is its meagre growth
performances. From data displayed in Figure 2 it can be seen that Romania has under-
performed Central and Eastern Europe in a significant way.
□ Eastern Europe □ Romania
Figure 2. Annual growth rates in Romania and average growth rates in Central and
Eastern Europe (the Baltics excepted). 1997 to 2000.
Source: Economic Survey of Europe, UN/ECE, 2001.
The unemployment rate also edged up, to reach a peak of 12.5 % in February
2000, although this figure cannot be readily interpreted as bad, if it can be associated
to much needed firm restructuring.
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