SOME RISKS AND CHALLENGES IN ACHIEVING ROMANIA'S EXTERNAL BALANCEJournal: The Journal CONTEMPORARY ECONOMY (Vol.7, No. 3)
Publication Date: 2022-09-30
Authors : Camelia MILEA;
Page : 139-150
Keywords : foreign deficit; risks; vulnerabilities; challenges; structural factors.;
In this article, the author aims to identify the main challenges and risks in achieving Romania's external balance, given our country's intention to achieve sustainable economic development. The methodology used combines literature review, empirical analysis of statistical data and their interpretation, with identification of causalities. Romania's external position has deteriorated during the pandemic crisis and it remains a vulnerability for our country's economy. From the analysis, it can be concluded that among the challenges and risks to Romania's external balance there are the structure of exports and imports, the deterioration of the external deficit financing way, the large fiscal deficits, the large public net external loans, from 2017 till present, the legislative unpredictability. The evolution from recent years of cost competitiveness and of factors that determine non-cost competitiveness have affected and will continue to influence negatively Romania's external balance. In addition, the low number of people with higher education employed, the low capacity for innovation of the economy, the increase in unit labor costs, the low level of labor productivity and the low technological achievements do not support the qualitative and quantitative increase of our country's exports, the production of goods of high added value and incorporating high technology, and thus the achievement of external balance.
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