09 Feb Money Talks #4
MoneyTalks is a project started by the students in MoneyFEST Committee (Transylvania College). Every week we will highlight the most important and relevant economic news, both national and international. We hope that the following article will help you understand and discover events you were not aware of, or deepen your understanding of already known topics.
Romania: dependent on food imports
Romania is becoming dependent on food imports. Seven years ago, production covered almost 70% of the consumption needs, but now we produce only 55,3% of what we need. Another problem is the local sugar production, which managed to cover in 2020 only 34,9% of the consumption needs. Local producers provide 82% of the necessary vegetables and only 68,5% fruits.
Now, Romania has come to cover from domestic production the consumption requirements of the inhabitants only in case of sheep and goat meat, but also grain. The minister of agriculture, Valeriu Tabara, declared that being dependent on imports for food is a risk for any country and community. He also declared that when the pandemic started one of the most important topics that needed to be taken into consideration was food stocks. According to the data from the Ministry of Agriculture, the imports in 2020 were 8.9 billion euros while the exports only reached 6.9 billion euros. (Maria Rondolean)
US economy grew 5.7 percent in 2021
In 2021 the US economy grew 5.7%, which is the fastest rate since the 7.2% growth in 1984 after a previous recession. Despite being affected by inflation and Covid, the economy improved as a result of increased private consumption, exports, and private investment. Beth Ann Bovino, chief economist at Standard & Poor’s Global Ratings stated: “It just goes to show that the U.S. economy has learned to adapt to the new variants and continues to produce’’.
It is expected, however, that the economy will grow at a slower pace this year due to further inflation, highly contagious Covid-19 variants and working from home. Economists have already cut their forecasts for the first quarter of 2022, partly because of the Omicron variant. As Greg McBride, chief financial analyst for Bankrate, said: “Omicron will put a dent in first quarter economic growth – we’re already seeing some of this with increased jobless claims – but demand remains strong, the labor market is tight, and the economy is poised for another year of solid, above-trend growth.” (Beatrice Isaila)
Should traders be concerned about a war in Ukraine?
As you might have heard, tensions between Russia and Ukraine keep rising. This makes a lot of economists question the extent to which a possible war between the two countries, and more if the case will be, will influence the world economy. It is clear that the first and the biggest impact will be felt in the European Gas market, but will that be all?
Experts believe that the shock waves from the Russian invasion will spread much more widely. Russia is not only the world’s biggest exporter of natural gas, it is also leading markets in terms of exports in oil, wheat and various metals. Thus, it can be said that, should war break-out, global markets would be in serious trouble. (Petra Simpalean)
AUTHORS: Students from MoneyFEST Committee