Romania’s economic growth at an all-time high

Romania and Cyprus had the most notable economic growth in the European Union in the first quarter of the year.

Roxana Vasile, 14.05.2015, 14:30

Romania and Cyprus had the most substantial economic
growth in the EU in the first quarter of the year, as compared to the previous
three months, according to preliminary estimates released on Wednesday by the
European Statistics Office. In figures, thanks to a 1.6% growth rate, the two
countries are the EU leaders, followed by Spain and Bulgaria with 0.9% each,
Slovakia – 0.8%, and France and Hungary – 0.6% each.

At the opposite pole we find Lithuania, Estonia, Greece
and Finland, which have reported decreases. The year-on-year rate Romania has
reported, 4.2%, is also the largest in the EU.

However, the geopolitical context requires special
attention. The European Bank for Reconstruction and Development says East
Europe should strengthen its capacity to withstand shocks, as the countries in
the region risk being affected by the political and economic problems in
Russia, Ukraine and Greece. Central European countries enjoy an economic
recovery supported by domestic demand. However, bad loans are still a problem,
while Russia and Ukraine remain in recession, which might affect growth in
other countries, says the EBRD. In addition, it is impossible to estimate the
impact of the Greek exit for its neighbouring countries, given that Greek banks
are operating in countries like Bulgaria and Romania.

Beyond political promises, Bucharest needs to take
concrete social and economic measures to support underprivileged people.
According to Eurostat, nearly half of them experience material deprivation,
which the European Statistics Office defines based on nine criteria: the people
in question have overdue installments and bill payments, cannot afford to buy a
colour TV, a car, a telephone or a washing machine, cannot afford home heating,
are unable to cope with unexpected expenses, cannot afford meat or fish at
least every other day or cannot afford to spend a one-week holiday elsewhere
than at home.

Those who meet three out of the nine criteria experience
material deprivation, while those who meet at least four criteria experience
severe material deprivation. In Romania, nearly half of the people suffer from
material deprivation, whereas those who experience severe material deprivation
account for 30% of the total population.