Bucharest Spearheads Growth 2007-2008
Ciprian Domnisoru Bucharest Business Daily – June 12, 2006
A 6.6 percent gross domestic product growth is estimated for the Bucharest region.
The Bucharest region will be the only one whose economic growth rate for 2006-2008 will exceed the national average and next year the capital will see a record rate, according to a study of the National Forecast Commission. The commission this year estimates a 6.6 percent gross domestic product growth for the Bucharest region (capital city and Ilfov County), compared to 6 percent for the whole country. In 2007, the growth will reach 7.1 percent in Bucharest and 6.2 percent for Romania while in 2008 the economic development will register a slight slowdown to 6.8 percent in the capital and 6.3 percent nationwide.
This year, the southwest area will rank second in top regions with a 6.1 percent increase while the northwest region is last, its economy increasing by only 5.4. The western part of Romania is expected to place last both next year and in 2008, with increases of 5.7 percent and 5.9 percent respectively. Last year the economy in the region was up 5.6 percent after higher increases in 2003 and 2004, of 9.6 and 8.5 percent respectively. The Forecast Commission explains that the western and central areas of Romania were advantaged by being closer to Western European markets and by a lower dependency on the primary sector, thus benefiting from larger foreign direct investment.
For 2006-2008, the commission forecasts an increase in the GDP per capita for the Bucharest region from 8,875.5 euros to 11, 416.3 euros, this being the largest level in the country. The western region comes next in the top, as the GDP per capita is expected to amount to 6,204.9 euros in 2008, followed by the center of the country, with 5,799.5 euros. For 2008, experts have forecast a national GDP per capita average of 5,450 euros.
The less developed regions are the southeast (4,609 euros), south (4,454 euros), southwest (4,454 euros) and northwest (5,022 euros). The northeast is the least developed region, with a GDP per capita of just 3,733.6 euros.
According to the National Forecast Commission, the reduction of economic gaps between regions will be noticeable in 2008, even for those regions with a low growth rate for 2005. The slowest growth last year was registered in the northeast (2.2 percent) and in the southeast, southwest and northwest.
Analysts are predicting growth rates over the national average for the construction sector, especially in less developed regions like the northeast, southeast and south, where significant funds will be allocated from the non-redeemable EU grants and from the state budget for large investment projects.
The construction sector is expected to reach a 12.2 percent increase in the Bucharest region, compared to the national average of 12 percent. For 2007 and 2008, the growth rate in Bucharest will fall under the national average, 9.9 percent compared to 11.1 percent for the whole country. This year the northeast regions will see the largest increase in the construction sector at 13 percent. The region will stay in the top for the next two years, with a 12 percent increase in 2007 and 12.5 percent in 2008.
In the services sector the Commission expects the largest increases in Bucharest for 2006 and the following two years: 7.1%, 7.8%, 7.2%.
In agriculture, increases for regions do not vary much from the yearly national average, in normal climate conditions. Slightly higher increases are forecast for the regions where the vegetal sector has a larger share, like the south, southwest and southeast.
Exports and imports are expected to keep the current structure. The largest share of the volume of Romanian foreign trade is conducted through the Bucharest region, with 22 percent of exports and 40 percent of imports. As for the trade balance, in the south and the southwest the volume of exports will exceed that of imports.