Changes

The return of collectivized farmland to its cultivators, one of the first initiatives of the post-December 1989 revolution government, resulted in a short-term decrease in agricultural production. Some four million small parcels representing 80% of the arable surface were returned to original owners or their heirs. Many of the recipients were elderly or city dwellers, and the slow progress of granting formal land titles remains an obstacle to leasing or selling land to active farmers.  

The return of collectivized farmland to its cultivators, one of the first initiatives of the post-December 1989 revolution government, resulted in a short-term decrease in agricultural production. Some four million small parcels representing 80% of the arable surface were returned to original owners or their heirs. Many of the recipients were elderly or city dwellers, and the slow progress of granting formal land titles remains an obstacle to leasing or selling land to active farmers.  

Financial and technical assistance continues to flow from the U.S., European Union, other industrial nations, and international financial institutions facilitating Romania's reintegration into the world economy. The International Monetary Fund, World Bank (IBRD), the European Bank for Reconstruction and Development (EBRD), and the U.S. Agency for International Development (USAID) all have programs and resident representatives in Romania, although USAID programs will phase out at the end of 2007. As of August 2007, Romania had attracted $21.8 billion in foreign direct investment. Of this total, U.S. direct investment accounted for $915.7 million (4.9%), ranking sixth among national investors but first among non-EU countries.  

Financial and technical assistance continues to flow from the U.S., European Union, other industrial nations, and international financial institutions facilitating Romania's reintegration into the world economy. The International Monetary Fund, World Bank (IBRD), the European Bank for Reconstruction and Development (EBRD), and the [[U.S. Agency for International Development]] (USAID) all have programs and resident representatives in Romania, although USAID programs will phase out at the end of 2007. As of August 2007, Romania had attracted $21.8 billion in foreign direct investment. Of this total, U.S. direct investment accounted for $915.7 million (4.9%), ranking sixth among national investors but first among non-EU countries.  

After years of IMF-guided economic reforms, Romania' stand-by agreement with the IMF expired on July 7, 2006. Romania's inflation rate has steadily decreased, while growth rates have been between 4% and 8% since 2001. However, the IMF has been critical of Romania's 2005 adoption of a 16% flat tax, pointing to the country's low rate of tax collection as a medium- to long-term impediment to growth. The IMF has also criticized Romania's public sector wage policy as inflationary. Public sector wages increased 36% through 2006 and the Government of Romania has approved public sector wage increases of 14%-19% over three rounds in 2007. Analysts have warned about increasing macroeconomic imbalances, such as the growing current account deficit (10.3% of GDP in 2006 and possibly reaching 15% in 2007, the IMF estimates). This along with deteriorating education and health services, aging and inadequate physical infrastructure, and a looming real estate price [[economic bubble|bubble]] are all seen as threats to future growth.  

After years of IMF-guided economic reforms, Romania' stand-by agreement with the IMF expired on July 7, 2006. Romania's inflation rate has steadily decreased, while growth rates have been between 4% and 8% since 2001. However, the IMF has been critical of Romania's 2005 adoption of a 16% flat tax, pointing to the country's low rate of tax collection as a medium- to long-term impediment to growth. The IMF has also criticized Romania's public sector wage policy as inflationary. Public sector wages increased 36% through 2006 and the Government of Romania has approved public sector wage increases of 14%-19% over three rounds in 2007. Analysts have warned about increasing macroeconomic imbalances, such as the growing current account deficit (10.3% of GDP in 2006 and possibly reaching 15% in 2007, the IMF estimates). This along with deteriorating education and health services, aging and inadequate physical infrastructure, and a looming real estate price [[economic bubble|bubble]] are all seen as threats to future growth.