Romania flag Romania: Economic outline

Economic Outline

Economic Indicators

For the latest updates on the key economic responses from governments to address the economic impact of the COVID-19 pandemic, please consult the IMF's policy tracking platform Policy Responses to COVID-19.

Due to the 2009 financial crisis, Romania endured an economic slowdown, especially in the automobile sector, which is subject to foreign demand. Financial difficulties pushed the country to seek financial help from the IMF, the European Commission and the World Bank. More recently, the Romanian economy was among the fastest-growing in the EU; nevertheless, the global crisis brought by the COVID-19 pandemic caused a drop of GDP in 2020, from which the country recovered fast in 2021 when growth was estimated at 7% by the IMF. Romania’s economy reached its pre-pandemic level already in the first half of the year, as growth was underpinned by strong domestic demand. The IMF forecast growth at 4.8% this year and 3.8% in 2023, with investment expected to remain strong, supported by the Recovery and Resilience Facility and other EU Funds. Foreign trade is forecast to benefit from easing of supply bottlenecks, but is not expected to contribute to growth.

Concerning public finances, the country experienced an expansionary trend in recent years, with a government deficit averaging above 4%, largely driven by pension increases. This trend was reinforced by the impact of the COVID-19 crisis, with the deficit estimated at 5.3% in 2021 (IMF), despite higher-than-expected tax revenues. The general government deficit is set to remain around 5.4% of GDP over the forecast horizon. Conversely, the expansionary fiscal policy prompted an increase in the debt-to-GDP ratio, which reached 51.1% in 2021 (from a pre-pandemic level of 36.8%). Despite the economic recovery, the ratio should follow an upward trend this year (52.9%) and in 2023 (54.9% - IMF). The steep and continuous increase in energy prices drove average inflation to 4.3% in 2021, with a forecast of 3.4% for 2022 (although the EU Commission sees the ratio rising to 5.3%).

An ageing population, the emigration of skilled labour, significant tax evasion, insufficient health care, and an aggressive loosening of the fiscal package may compromise Romania’s long-term growth and economic stability and are the economy's top vulnerabilities. With 35.8% of the population at risk of poverty or social exclusion, Romania remains one of the poorest countries in Europe (data by Eurostat). Furthermore, the COVID-19 crisis led to a rise in unemployment, estimated at 4.9% in 2021. Average wage growth remained solid at 7% (OECD) and a tight labour market is expected to push wages up over the forecast horizon.

 
Main Indicators 20202021 (e)2022 (e)2023 (e)2024 (e)
GDP (billions USD) 249.51284.09299.89311.55337.21
GDP (Constant Prices, Annual % Change) -3.75.94.83.13.8
GDP per Capita (USD) 1214151617
General Government Balance (in % of GDP) -5.3-7.6-5.8-4.7-4.9
General Government Gross Debt (in % of GDP) 49.651.449.751.752.9
Inflation Rate (%) 2.65.013.311.03.6
Unemployment Rate (% of the Labour Force) 5.05.65.55.55.4
Current Account (billions USD) -12.44-19.83-25.31-24.96-22.57
Current Account (in % of GDP) -5.0-7.0-8.4-8.0-6.7

Source: IMF – World Economic Outlook Database, 2016

Note: (e) Estimated Data

 
Monetary Indicators 20162017201820192020
Romanian New Leu (RON) - Average Annual Exchange Rate For 1 GHS 1.020.930.860.810.76

Source: World Bank, 2015

 

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Latest Update: November 2022