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Romania Defence and Security Report Q1 2011
Business Monitor International, Jan 2011, Pages: 82
Business Monitor International's Romania Defence and Security Report provides industry professionals and strategists, corporate analysts, defence and security associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Romania's defence and security industry.
Despite numerous fiscal difficulties, 2010 has shown the first signs of positive growth for the Romanian defence industry. This may well be short-lived, however; austerity measures have yet to have an effects on the economy toward the end of the year. Judicial reform and political stability are key problems for the country in relation to EU-IMF bailout packages that Romania relies on for development. If these issues are not resolved, the country’s defence industry is likely to see a double dip growth pattern, with further contraction in 2011.
Romania's latest bout of bilateral tensions with Russia is reflective of deep-seated friction between the two former Communist states. Indeed, although current disagreements centre on Russia's allegations that a Romanian official has been spying, we expect further diplomatic spats over the long term due to fundamental disagreements over Romania's pro-Western foreign policy.
While Romania's economy has shown some moderate improvement through recent quarters, we believe that its path out of recession is not yet secure. Indeed, macroeconomic imbalances remain substantial: we expect the drastic austerity programme that the government is currently implementing will cause economic activity to decline through the coming quarters. On this basis, we see 2010 real GDP expanding by 1.1% in 2010, and by a less-than-impressive 3.9% in 2011. The defence industry will see further restructuring and privatisation moving into 2011. To date this has been highly successful in attracting interest from foreign firms. Joint ventures, at least with the larger Romanian companies, have grown. In the longer term, privatisation, modernisation and increasing foreign involvement are likely to drive defence exports.'
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