EU integration challenges for Romania - study

Analysis

Romania’s economy is too dependent on foreign investment and domestic saving is not stimulated in the least, reveal findings of a recent study carried out by the Romanian Centre for Economic Policy (CEROPE).

The study highlights that Romania’s population will continue to decrease in the years ahead, the weight of the industry and agriculture in GDP will diminish, services will consolidate its position in the economy, and foreign investment will continue on a strong trend.

CEROPE experts are recommending the replacement of foreign investment funding with non-repayable European funds, arguing that the European funds will not generate capital outflows, as is the case with profit repatriation and dividends of foreign investment. According to the study, Romania needs policies to discourage consumption and encourage savings, particularly long-term savings.

CEROPE points out that the labor demand in Romania might be met increasingly by immigrants, given the diminishing population. Labor and own capital shortages will continue in Romania, and more attention should be attached to research and technology. The study says communications, trade and the wood industry are three sectors in which Romania has a competitive edge on other Central European countries. (legalromania.com)

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