Tuesday, November 4, 2008

EIU: Romania is one of the most vulnerable countries to European financial turmoil

Source: EIU, ACG News Agency

Economist Intelligence Unit (EIU) worsened the estimate regarding the economic evolution in the euro zone and the US, but it kept the message connected to the Romanian economy, drawing the attention to the state’s needs of external financing.

Economist Intelligence Unit (EIU) worsened the estimate regarding the economic evolution in the euro zone and the US, but it kept the message connected to the Romanian economy, drawing the attention to the state’s needs of external financing.

“Romania is one of the most vulnerable countries to international financial turmoil. The state will have current account deficit of over 10% during the period of prognosis ( up to 2013) based on the economic growth, but, mostly, on the acceleration of domestic consumption”, the most recent edition of the EIU global prognosis shows.

The warning sent by the EIU analysts are similar to those comprised in former editions of the global prognosis of the institution. Romania’s financing requirements are almost 30% of the GDP.

Financing was made through influx of foreign direct investment, but it will become more and more difficult, as privatization is over, the report says Another weak point identified by economists refers to the depreciation of the national currency, under the conditions where most part of the foreign debt is denominated in euro.

Romania, 50th out of 167 in the democracy index

According to the study of Economist Intelligence Unit on 167 countries, Romania is 50th in the democracy index, being in the category of countries with “ democracies with shortcomings” similarly to most of the states in southern Europe.

Greece, Slovenia and the Czech Republic are the only countries in this area included in the group of the most democratic countries in the world.

The index is based on the marks granted to the countries on the basis of over 60 indices in five categories: electoral process and pluralism, governing functioning, political participation, political culture and civil liberties.

For each of these categories, the nations evaluated get marks from 0 to 10. The general index of democracy is the average of indices of the five categories. Almost without any exception, the best markes of the countries are for the electoral process and pluralism and civil liberties.

With an average of 9.88 and marks of 10,00 for four of the five categories, Sweden is the first in the table. There follow Norway, Iceland, the Netherlands, Denmark, Finland, New Zealand, Switzerland and Luxembourg. Romania had the average of 8.53 being before Bulgaria ( 52nd), Ukraine ( 53) and Moldova (61). The states with the lowest markes are North Korea, Ciad, Turkmenistan, Uzbekistan, Mianmar, Saudi Arabia.

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