Economic Overview
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 in GDP in 2020, from which the country recovered fast in 2021. In 2022, the country continued on its growth path, with an estimated GDP increase of 4.5% thanks to strong gross fixed capital formation and private consumption (EU Commission). For 2023, the negative effect of still high inflation, tight financing conditions and weaker performance of partner economies are all set to lower Romania’s real GDP growth to 2.5% (3.1% according to the IMF), with investment expected to remain strong, supported by the Recovery and Resilience Facility and other EU Funds. As internal and external conditions improve, the economy is expected to grow by 3% in 2024.
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 and of the measures taken to mitigate the impact of high energy prices, resulting in an estimated budget deficit of 5.8% of GDP in 2022. As the energy support schemes (including caps on electricity and gas to households and to a lesser extent firms) will be financed by windfall taxes, the impact on the budget should be limited in 2023, with the IMF projecting the deficit at 4.7% of GDP. At 49.7% in 2022, the debt-to-GDP ratio is expected to follow an upward trend over the forecast horizon, at 51.7% this year and 51.9% in 2024 (IMF). The 12-month average inflation stood at 12% in 2022 (EU Commission) as a consequence of high energy and food prices and the spill-over effect on other components. HICP inflation is projected at 9.7% for 2023 before slowing down to 5.5% in 2024 due to the extension of the energy price cap, lower commodity prices and base effects kicking in.
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. Despite a relatively low level of unemployment (at 5.5% in 2022), Romania remains one of the poorest countries in Europe, with 34.4% of the population at risk of poverty or social exclusion (the highest ratio in the EU - data by Eurostat). The IMF estimated the country’s GDP per capita (PPP) at USD 38,097 in 2022, still 29.4% below the EU average.
| Main Indicators | 2020 | 2021 | 2022 (E) | 2023 (E) | 2024 (E) |
| GDP (billions USD) | 251.70 | 285.61 | 301.85 | 348.90 | 376.67 |
| GDP (Constant Prices, Annual % Change) | -3.7 | 5.9 | 4.8 | 2.4 | 3.7 |
| GDP per Capita (USD) | 13,022 | 14,874 | 15,851 | 18,530 | 20,175 |
| General Government Balance (in % of GDP) | -4.6 | -7.7 | -5.9 | -5.4 | -5.1 |
| General Government Gross Debt (in % of GDP) | 49.4 | 51.1 | 48.7 | 48.3 | 49.3 |
| Inflation Rate (%) | 2.6 | 5.0 | 13.8 | 10.5 | 5.8 |
| Unemployment Rate (% of the Labour Force) | 6.1 | 5.6 | 5.6 | 5.6 | 5.4 |
| Current Account (billions USD) | -12.44 | -20.68 | -28.00 | -27.62 | -29.05 |
| Current Account (in % of GDP) | -4.9 | -7.2 | -9.3 | -7.9 | -7.7 |
Source: IMF – World Economic Outlook Database , October 2021
Country Risk
See the country risk analysis provided by La Coface.
