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Eastern promise

Despite protests raging against the government for reneging on its anticorruption measures, Romania has great potential in the region. Justin Keay looks at IPO and M&A opportunities.

Mention Romania to most people and what may first come to mind is underdevelopment, poverty, corruption and ingrained TV images of the unlamented late president Nicolae Ceaușescu. Yet, after 26 years of a painstaking dismantling of the grim legacy he left behind, supported by foreign investment and membership of the European Union, Romania is a country transformed. Major anti-corruption protests across the country have shown what the people want. And a politically stable Romania would be a very good prospect for future business investment.

For the past few years Romania has been Europe’s second fastest growing economy after Poland, fuelled by strong domestic demand, decent inflows of foreign direct investment (FDI) and an impressive export performance. This is south-east Europe’s largest and most diversified economy, producing everything from agricultural products, cars and white goods, to hi-tech components – all alongside a fastdeveloping service sector.

Business and investment are supported by state-of-the-art fibre-optics, which has given Romania one of the fastest internet networks in the world. “Tax cuts, a rise in the minimum wage and increases in public sector wages are all sustaining domestic demand, which has been driving growth,” says Bojan Markovic, lead economist for South-East Europe at the European Bank for Reconstruction & Development (EBRD).

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