Romania has only one red flag in EU’s macroeconomic imbalance procedure scoreboard

Romania has only one “red flag” in the macroeconomic imbalance procedure (MIP) scoreboard of the European Union, for the net international investment position, according to Eurostat.

The MIP is part of the six-pack regulation on economic governance adopted by the European Parliament and Council in November 2011.

The MIP scoreboard provides the statistical support to the annual Alert Mechanism Report released by the European Commission at the start of the European Semester 2019. The Alert Mechanism Report identifies those Member States for which in-depth analyses are required on the basis of an economic reading of the scoreboard indicators.

The MIP Scoreboard consists of 14 indicators relevant for the early detection of existing or emerging macroeconomic imbalances at Member State level.

The 14 indicators are grouped in three categories: external imbalances and competitiveness, internal imbalances and employment.

Romania is considered unbalanced in only one out of 14 indicators – net international investment position, with -47.7 percent of GDP – a normal situation for developing countries searching to attract foreign direct investment (FDI) to ensure faster development.

For all the other 13 indicators, Romania is considered in sustainable position -the current account balance (-2.2 percent of GDP), real effective exchange rate with main trading partners – 3-year change (-5,5 percent), export market share as percentage of world exports – 5-year change (+37 percent), nominal unit labour cost index compared with 2010 – 3-year change (+11.9 percent), house price index compared with 2015 deflated – 1-year change (+4 percent), private sector credit flow as percent of GDP (1.7 percent), private sector debt as percent of GDP (50.8 percent), government gross debt (35.1 percent of GDP), unemployment rate – 3-year average (5.9 percent) and total financial sector liabilities – 1-year change (8.1 percent).

For the 3 employment indicators, Romania also scores well, Eurostat data show.

The data from National Accounts and Balance of Payments/International Investment Position used for the compilation of the MIP Scoreboard indicators are based on the European System of National and Regional Accounts in the European Union (ESA 2010) and the sixth edition of the IMF’s Balance of Payments and International Investment Position Manual (BPM6).

MIP-relevant statistical data originate from statistical domains with long track records and of recognised quality.

Eurostat collects the data for MIP Scoreboard indicators from Member States. Other data sources are the Commission’s Directorate General for Economic and Financial Affairs and the International Monetary Fund.

The cut-off date for the data, that is the date on which the data were extracted from the Eurostat database, was the 24th October 2018, according to Eurostat.

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