Analysts say this year exports to countries outside the EU will be helped by a good agricultural year and by the depreciation of the leu against the dollar, but in the future, in order to compensate for the reduction of exports to the EU, Romania should significantly expand its reach on markets outside the EU, a long-term process, given the significant competition over production costs.
Analysts say this year’s exports growth also owes to the increase in the price of oil, raw materials and food prices, not just to the higher volumes of exports.
“On the short term, Romania’s exports to countries outside the EU will be supported by the depreciation of the leu against the dollar and will be helped by the good agricultural production recorded in 2011. In fact, high revenues from exports to non-EU countries in 2011 against 2010 are mainly generated by the increase in food prices internationally and by the higher prices of petroleum products and of the other raw materials against 2010,” commented Dan Bucsa, chief economist of UniCredit Tiriac Bank.
Although Romania’s exports continued to grow this year, the growth rate of exports to EU countries slowed down.
In July, exports reached EUR3.8 billion, up 11.5% against July of last year. Growth continued to slow down, after rates of 30-50% in the first five months of the year, amid the debt crisis affecting countries in the Eurozone, Romania’s main trade partners. While exports to EU countries rose by just 5.8% in July 2011 against July 2010, exports to countries outside the EU rose by 26.1%.
“In order to boost exports to non-EU countries, Romanian exporters should look for markets for their processed (manufactured) products which entail higher technology and seek to avoid (as much as possible) the competition of low production costs, which are to be found especially in eastern Asia,” said Bucsa.
Exporters could turn to large close-by markets (Russia, Ukraine, Turkey), South American markets (where economic growth is strong, but based mainly on exploiting natural resources) and markets that seem to be coping better in this crisis (Australia, Canada, Israel, South Africa, Scandinavia), says the chief economist of UniCredit Tiriac.
(English version by Daniela Stoican; Editing by Radu Bostan)