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GOLDESSAYS

Romanian Economy

Thesis

Romania Intends to be the Europe’s Quickest Recovering Economy in 2016

This research paper investigates the Romanian economy’s current rapid growth in both the frontier market and the emerging market. The research is conducted with regards to the micro, small and international capitalizations’ growth, as well as to the frontier and emerging market strategy performance. In the year 2008, the Romania experienced a laborious period due to the international financial crisis as many of the European economies did . Since then, several strategies have been put in place to revive the economy of the nation. This paper primarily addresses the stimulating cyclical regaining, structural reform approach and a cultivating responsibility in the regional energy landscape, and analyses the assumptions behind the Romania’s fast economic development.

Keywords:

Cyclical restoration, structural reforms approach, regional cultivating responsibility, financial crisis, composure, and economic growth.

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Abstract

Due to the financial crisis experienced internationally in 2008, the Romanian economy has undergone the uncertainties in reviving. The crisis interfered greatly with the banking system, which was compounded to gain an advantage. However, through diminution of loaning activities and rising of interest rates for loans yet to be recovered the economy of Romania became one of the quickest recovering economies. Due to a steady growth of the gross domestic product (GDP), the International Monetary Fund [IMF] considers Romania one of the economies with an evincive health. This favourable outcome has been achieved through the implementation of certain stimulating practices such as the cyclical regaining, structural reformation and cultivating responsibility of business.

Romanian Economy

The Efficiency Depicted in the Laid Strategies

The financial crisis brought consumer’s demands which could not be met by the Romanian economy. Therefore, to recover, the economy was forced to raise the interest rates and reduce an accessibility of loans. Nonperforming loans were eliminated to provide a room for the effective revenue collection. These changes have led to positive growth of the Romanian economy. Research shows that the rate of Romania’s economic growth is one of the quickest in Europe. Fiscal space of the Romanian economy refers to spending and revenue collection, however, its corruption has led to retardation of the process. The corruption has become extremely offensive in this economy and the government has brought reforms to eliminate it. High interest rates, elimination of nonperforming loans, real wages and adequate revenue collection are the main reasons behind this quick economic growth in Romania. Through elevation of interest on loans fewer consumers can be fully accommodated by the bank and return for loans. The strategy of raising the interest charged on loans solves the crisis of consumers’ demands.

Implementation and Analysis

Romania has singular strategies for frontier and emerging markets compared to other European countries. High interest rates charged on consumers’ loans, elimination of nonperforming loans, paying real wages and adequate revenue collection are some of the strategies laid to recover the economy from the 2008 crisis. These strategies have been reinforced through the formulation of a stimulating cyclical regaining, structural reform approach and cultivating of responsibility in the regional energy landscape. The 2008 financial crisis grounded banking sector affecting the consumers and the whole economy tremendously.

The banking sector has assisted in a restoration of the Romanian economy through eliminating of nonperforming loans and introducing of high interest on loans offered, which ensures maximum collection of revenue in the economy. There are however challenges experienced in the implementation of these mentioned strategies. These challenges include; corruption, inadequate infrastructure, and consumer economic restoration, which has led to inflation. The stimulating cyclical regaining, structural reform approach and raising a responsibility in the regional energy landscape make the Romanian economy a uniquely thriving economy in Europe. From the statistical data, in 2014, there was an improvement in GDP by 3.9%.  

Quantitative and Qualitative Research Methods

The qualitative and quantitative research methods used to acquire the information for this project are the online search of information regarding the Romanian economy, observation of its structures as well as reforms and trends applied to restore the economy. Some of the statistical results evident from the collected data represented graphically show the quick regional economic growth. The fiscal space is perceived to have been bountiful, however, corruption has led to stagnation of the process. Demography has played a vital role in ensuring the economic growth. The presence of cheap labour has enhanced the productivity resulting in the economic growth.

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