A comparison of the economic evolution from 1990 to [627157]

A comparison of the economic evolution from 1990 to
present between Romania and it's neighbours
The year 1990, the first year of freedom, found Romania in the starting
position towards the market economy. In the same situation were also the
neighbours from the south and west, the Bulgarians and the Hungarians. In the
southwest, Yugoslavia was on the brink of civil war, and in the east and north,
the USSR lived its last days. The year 1990 finds Romania on the third place
out of six ranked by population. Yugoslavia at that time had a population of
several hundred thousand people larger than Romania, and Ukraine, still part of
the USSR, had a double population. Regarding external debts, Romania began
the road to democracy with a clean past. Neighbours from the east and north,
although formally part of the USSR, were as clean as we were. The most
indebted were the Hungarians, followed by Serbs and Bulgarians.
External debt stocks, total (DOD, current US$)
Data source: World Bank, World Development Indicators

In terms of productivity, measured by GDP per capita, according to World
Bank statistics, we were under Bulgarians, Hungarians and Serbs. The first in
terms of productivity were the Serbs, also surpasing the GDP per capita average
in Yugoslavia. For Serbs, the future looked good from an economic point of
view, but the future was not in line with this forecast. The next two years are
characterized by economic recession in all countries, except Hungary, due to
different reasons. The real war began in Serbia and Moldova while for the
Romanians, Bulgarians and Ukrainians began the war of transition without
reforms for the population. The only country in which the first transition years
meant a transition from one system to another, together with some reforms, and
not a slow death of the old system, was Hungary. Evidence is the evolution of
GDP per capita.
GDP per capita (current US$)
Data source: World Bank, World Development Indicators
The year 1994 is important to us because we have begun to grow again in
terms of economy. Growth, however, was only for a short period of time, the
major problems of the productive system, especially in stock, will emerge after
a few years. The year 1996 is a year of economic growth for all economies in

the area. It is also the year of the first alternation of power in Romania.
Romania retains its third economy in the region, while the first place was still
occupied by Hungary at that time.
The Romanian economy was losing ground to the economy of Hungary,
whose GDP per capita was three times higher than ours. The development gap
will be made by the population the following year, when we missed the
invitation to join NATO. Interestingly, Serbia, after the war, was gaining
ground, threatening our position as the third regional economy. At productivity
level, Serbia's GDP per capita was superior to the existing one in Romania,
even if they went through war
The end of the decade finds Serbia in a new war while Moldova and
Ukraine with free fall economies. In 2002, we are invited to join NATO, and in
2004 accession is happening. The productivity difference to the Hungarians is
preserved, but we are surpassing Serbia for the first time in this chapter. The
economies of Moldova and Ukraine are beginning to recover, but they lose
contact, in terms of productivity with the European space while Romania
becomes the second economy in the region.
GDP growth (annual %)
Data source: World Bank, World Development Indicators

After the Orange Revolution in Ukraine, for both Romania and Ukraine,
there is an alternation in power in the two countries. Also, in the year 2004,
Hungary joins the EU, Romania and the southern neighbours will do the same
after three years.
2007 is the year of Romania and Bulgaria joining the EU. Productivity in
the two countries favored Romania, three years before, it was close to value.
Romania becomes the first economy in the region, surpassing for the first time
since 1990, Hungary's economy. The productivity gap between Romania and
Hungary is diminishing, and the gap between Romania and its other
neighbours, except for Bulgaria, is increasing in our favor.
The price paid for the recorded economic growth is nine times higher than
in 1999, largely private debt. Public debt-to-GDP ratio remains low (below 13%
of GDP). The year 2013 finds Romania's economy in recovery after the
recession in 2009 – 2011, with a decrease in the productivity gap with Hungary,
but with an external debt increase of USD 50 billion, which is mostly
Government debt (about 39% of GDP). On the whole, the evolution of
Romania's economy compared to our neighbours in 23 years is satisfactory,
considering the productivity gaps in 1990.
The economy in Romania grew by 4.8% in 2016 while Molodova's
economy grew by 4.1% after recovering from the 2015 recession. Romania's
economic growth is the highest since 2008 and the 3rd fastest in EU. This
growth is led by the private consumption, which was accelerated by the
reduction of the V AT from 24% to 20% and by an increase in the wages from
the public sector and pensions.
Bulgaria's GDP increased by 3.4% in 2016, a big improvement compared
with the previous 5 years. The main factor that led to this increase is the number
of exports, which was assisted by a high demand from the European Union. The
private consumption also improved considerably, mostly due to the low
inflation.
The other neighbours had a modest increase in 2016, Ukraine for example
had a 2.3% increase due to a considerable growth of the agriculture harvesting.
Serbia had a 2.8% growth and Hungary with a modest 2.1% was the last in
terms of annual GDP growth.

Inflation, consumer prices (annual %)
Data source: World Bank, World Development Indicators
In Romania the inflation rate fell to a new record low, same goes for
almost all the neighbours. Ukraine's major increase in inflation in 2015 to
43.3% slowed down to 12.4% due to the rate of exchange stabilization and a
more prudent monetary policy. In the same time, the wages increased by 11.6%
at the end of the year 2016. However, the labour market conditions are still
weak, with an unemployment rate of 10%.
The labor market became stronger in Romania, due to the economy
sustained growth and fiscal relaxation. Wages also increased by 12% and the
unemployment rate dropped to a eight year low at 5.5%. Same goes for Serbia
and Bulgaria, with new unemployment rate record lows at 13%, respectively
7.6% as new jobs were created. Moldova became first in the region regarding
the unemployment rate, with an increase from 2014 record low of 3.9% to 4.9%
in 2016.

Unemployment, total (% of total labor force)
Data source: World Bank, World Development Indicators
As a conclusion it's pretty clear that the EU members reported a
substantial and positive increase in GDP per capita while the countries which
alternated between EU and Russian values had a much slower increase, and a
higher economic instability. There is an average increase by 12% of the GDP
per capita in the new members of the EU across Europe. Despite the differences
between EU members, there are clear signs that the benefits have notably
outweighed the costs.