Hungary Pest Analysis

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Country Profile and PESTEL Analysis

Political Factors
Romania is an independent parliamentary republic with judicial, executive and legislative branches of government. the president serves as Romania’s chief of state. the prime minister serves as the head of the government and is appointed by the president with the consent of the parliament. the capital city is Bucharest. in accordance to risk assessment, Romania has low political risk.

after the falling of communist regime, Romania has been gradually liberalizing its trade regulations and incentive and now follows the guidelines set by the EU. the ruling government is constantly updating the laws and financial conditions for doing business in Romania in order to maintain the positive growth of the economy. on june 27, 2008 the Romanian government approved the latest investment law, the aim of which is to provide and umbrella framework in which processes of application and allocation of state aids will be made more consistent and transparent. other business incentives that the country offers are no limits of foreign participation in commercial companies (a foreign investor may establish a 100% owned enterprise in Romania ), full repatriation of capital and profits, and equal treatment of residents and non-residents investors. the two main trade partners of Romania are Italy and Germany.

Economics Factors
the sectors for the highest contribution to the GDP in Romania are industry (36,7%), services (37, 7%) and agriculture (8,6%). capital inflows have nourished a constantly increasing domestic spending boom. although, current account deficits are normal during the phase at which the Romanian economy is going though, Romania’s gap is above what could be considered a “normal” level and raises concerns over medium and long-term sustainability. inc case of recession on the global markets, foreign investors may suddenly draw their investments out of Romania, which can cause a huge collapse in the...
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