How real are Macroeconomic Parameters of Romania during 1989-2009 Angelica BĂCESCU-CĂRBUNARU The Bucharest Academy of Economic Studies, Romania E-mail: [email protected] Phone: 021.319.19.01/383 Abstract The main idea of this article is that GDP of Romania related to the last 12 years is extremely high and creates the illusion that in a short period of time it could become a developed country from economic viewpoint. Based of the analysis of macroeconomic indicators from official statistical publications, the necessary arguments are brought to demonstrate how real macroeconomic parameters of Romania are during 1989-2009. Keywords: Gross domestic product, commercial deficit, macroeconomic parameters, average exchange rate, self consumption production, des-industrialization JEL classification: E21; E23; E42 Preliminary considerations After 20 years since 1989 events, the economy of Romania has become an economy with severe macroeconomic disequilibria, synthesized in the disequilibrium between aggregated supply and offer. That is why, the first measure to start the national economy rehabilitation, should be the balance of commercial exchanges and abroad, to end the deficit of foreign trade which in the last 20 years amounted an astronomic figure of 142 billion USD. Surveying the data regarding the deficit of foreign trade of Romania, resulted during all these 20 years since the change of December 1989, we notice that not only the amount of this deficit is very extremely high, but especially the fact that Gross Domestic Product reported to be achieved in the last 12 years and mostly during 2005-2008 is arguable high and unbelievably to be accepted. That is why we try to point out the causes producing these growths and which possibilities exist for a government wishing to survey wrong development, in order to 102 Volume 11, Issue 1, March 2010 Review of International Comparative Management rehabilitate the national economy, that it could reach its purpose justifying its existence. 1. Gross domestic product and deficit of foreign trade deficit Who pursued INS yearly statistical bulletins and NBR yearly reports could notice a kind of acceleration of GFP growth, since 2005 (table no.1). Table with influences over national income, due to deficit of foreign trade Table 1 shed by i n i m i DP d Export net: Import CIF CIF Import million USD USD million G Export FOB Million USD Million USD Million USD (col.1.- col.5) col.5) (col.1.- parameters (col.2 – col.3) (col.2 – col.3) Million /USD /USD Million Coverage (%) (%) Coverage Deficit % of GDP CIF (col.2 : col. 3) col. : (col.2 CIF Yearly GDP achieved achieved GDP Yearly deficit of deficit foreign trade Through export ofimport Export FOB - FOB - Export CIF import Yearly Calendar years years Calendar name of 0 1 2 3 4 5 6 7 2000 36.719 10.366,5 13.054,5 79,4 -2.688,0 7,3 34.031,0 Legisl. 3 139.470 35.686,8 46.728,7 76,4 11.141,9 8,0 128.320,9 2001 38.718 11.393,0 15.568,0 73,1 - 4.175,0 10,8 34.543,0 2002 45.790 13.876,0 17.847,0 77,8 - 3.971,0 8,7 41.819,0 2003 56.951 16.722,0 22.706,0 73,6 - 5.984,0 10,5 50.967,0 2004 73.167 23.515,0 32.638,0 72,0 -9.123,0 12,5 64.044,0 Legisl. 4 214.626 65.506,0 88.759,0 73,8 -23.253,0 10,9 191.373,0 2005 98.565 26.795,1 39.212,2 68,3 -12.417,1 12,6 86.147,9 2006 121.609 32.400,2 51.119,7 63,4 - 18.719,5 15,4 102.889,5 2007 163.629 39.663,4 68.691,8 57,7 - 29.028,6 17,7 134.600,4 2008 182.924 47.059,0 78.588,2 59,9 - 31.529,2 17,4 151.394,8 Legisl. 5 566.727 145.917,7 237.611,9 61,4 -91.694,4 16,2 475.032,6 From a total GDP of 36.167 billion USD obtained in 2000, after four years it reached 73.167 billion USD, namely, a growth of 1.9926 times and thus a plus of 36.448 billion USD, which meant an average increase of 9 billions/year. The sum of GDPs obtained in four years was 214.626 billion USD, as against 139.470 billion USD between 1997 and 2000. During 2005-2008, it jumped from a total GDP of 73.167 billion USD obtained in 2004, to about.182.924 billion USD on 31.12.2008, and then at the end of 2006, it registered 121.609 billion USD. GDP total plus obtained at the end of 2008 as against 2004 was equal to 109.757billion USD in four years. Review of International Comparative Management Volume 11, Issue 1, March 2010 103 The avalanche of growths started even in 2005, when it was reported a GDP plus equal to 25.4 billion USD as against the previous year. Total sum of yearly GDPs for four years 2005-2008 was 566.727 billion USD, which, in a forecast by extrapolation, could create the illusion that in 16 years (four legislations) with the same growths, Romania reached to be an industrialized country which achieved a GDP of over 500 billion USD/year, growth for which West Germany needed 40 years. Yearly deficit of Romania’s export from the legislature 4, reduced the sum of GDPs reported between 2001-2004 by 23.253 billion USD, diminishing GDP by 214.626 billions, to 191.373 billion USD. A reduction by imports too was done in the legislature 5 as well, when total GDP of 566.727 billion USD between 01.01.2005 and 31.12.2008, was reduced by deficit of foreign trade with 91.694 billion USD, which determined that national income should fall to 475.032 billion USD, namely 83.82% of total GDP (table no.2). Macroeconomic parameters obtained in the last 20 years of national economy in Romania Table 2 in year year prices persons persons Number of prices 1989 prices 1989 GNP/capita GNP/capita Poverty rate rate Poverty 1989 against nominal pricesnominal Yearly GDP as as GDP Yearly GDP in current against previous against GDP in constant GDP evolution as GDP evolution employees in thou Change in USD of USD in Change GDP in current or Average exchange rate Billion lei billion lei Billion % % % USD/inh lei/USD thou pers. Calendar year USD abitant 0 1 2 3 4 5 6 7 8 9 1988 849,38 857,0 ? - 0,5 105,0 ? ? ? 1989 800,00 800,0 ? - 5,8 100,0 ? ? 8.323,0 1990 755,19 857,9 34,730 - 5,6 94,4 1.640 21,56 8.142,2 1991 657,88 2.203,9 27,619 -12,9 82,2 1.390 76,47 7.483,5 1992 599,50 6.029,2 24,438 - 8,8 74,9 1.130 307,95 6.627,4 1993 608,49 20.035,7 25,963 + 1,5 76,1 1.140 760,10 6.385,3 1994 632,22 49.773,2 30,086 + 3,9 79,0 1.230 1.655,09 6.201,0 1995 677,21 72.135,5 35,533 + 7,1 25,27 84,6 1.480 2.033,28 6.048,0 1996 703,75 108.919,6 35,508 + 3,9 19,85 88,0 1.600 3.082,28 5.894,0 1997 655,22 250.480,2 34,843 - 6,9 30,81 81,9 1.410 7.167,94 5.399,0 1998 607,20 34,158 - 7,3 33,82 75,9 1.360 8.875,55 5.182,0 1999 599,80 34,027 - 2,3 41,20 75,0 1.470 15.332,93 4.659,0 2000 603,21 36.719 + 1,6 43,60 75,4 1.670 21.692,74 4.646,0 19982 627,59 338.670,0 34,158 - 6,4 1.360 8.875,55 19992 619,93 521.735,5 34,027 - 1,2 1.470 15.332,93 20002 633,62 803.773,1 36,719 + 2,2 1.670 21.692,74 2001 669,69 1.167.687,1 38,718 + 5,7 83,4 ? 29.060,86 4.613,0 2002 702,54 1.514.750,9 45,790 + 5,1 87,8 ? 33.055.00 4.615,0 2003 736,96 1.903.353,8 56,951 + 5,2 92,1 ? 33.200,00 4.655,0 104 Volume 11, Issue 1, March 2010 Review of International Comparative Management in year year prices persons persons Number of prices 1989 prices GNP/capita Poverty rate rate Poverty 1989 against nominal prices Yearly GDP as GDP Yearly GDP in current against previousagainst GDP in constant GDP evolution as evolution GDP employees in thou Change in USD of USD of in Change GDP in current or Average exchange rate Billion lei billion lei Billion % % % USD/inh lei/USD thou pers. Calendar year USD abitant 2004 798,12* 2.387.914,3 73,167 + 8,3 99,8 ? 32.637,00 4.652,7 2005 832,44* 288.176,11 98,565 + 4,2 104,1 ? 2,9237* 4.501,2 2006 898,20* 344.535,51 121,609 + 7,9 112,3 ? 2,8331* 4.575,0 2007 952,09* 404.708,81 163,629 + 6,0 119,0 ? 2,4685* 4.717,2 2008* 1.026,35* 436.275,21* 182,924* + 7,8 128,3 ? 2,3850* 4.825,13 Source: NBR yearly report 1996, 1998, 2000 and 2004, INS statistical bulletin 12/2002, 1/2003 and INS press release no.11of 26.02.04.