BERTRAND MALLET - Inchcape

Romania Commercial OverviewLarge countrywith highpopulation21.4m people, 240,000sq kmEmergingeconomyStrong economic growth since early 2000s with GDP percapita CAGR of 30.1% 2003 – 2007 but economycontracted in 2009 by 20.1%. GDP in local currencydeclined by 3.2% in 2009Strong austeritymeasures takenSalary cut in public sector and social paymentsLay-offs in public sector.Increase in VAT from 19% to 24%Expense of governmental institutions cut2003-07 2008-09 2010-15Continuedsupport from IMFAgreement for new 24-month precautionary stand-byarrangement (Euro 3.6bn)GDP growth(CAGR)30.1% (20.1)% 9.5%RecoveryexpectedFuture growthenginesBroadly flat in 2011 with recovery expected in 2012Economic growth to be fuelled by infrastructuredevelopment (with support of EU funds), direct foreigninvestments, strong industrial output and privateconsumptionPopulation(CAGR)(0.2)% (0.2)% (0.2)%Inflation 14.1% -6.5% 6.3%-4.7% 7.8%-2.9%Romania has been impacted by the downturn but is expected to recover graduallySource: IMF