
Economic Overview
Romania has made significant progress in economic performance and convergence with the European Union but faces challenges in promoting growth that is more inclusive and sustainable, both economically and environmentally. Following robust economic growth in 2022 (+4.7%) driven by private consumption and investments, Romania’s economic output grew by 2.4% in 2023. However, growth slowed to 0.9% in 2024, primarily driven by the final consumption expenditure of households, which contributed 3.6 percentage points (data INSEE). A gradual increase in external demand and exports, further easing of financial conditions, resilient private consumption, and an acceleration of private investment are expected to drive real GDP growth to 2.5% in 2025 and 2.9% in 2026. EU-funded investment in public infrastructure is set to provide strong support for growth (EU Commission).
According to preliminary estimates from the Finance Ministry, Romania's general government budget deficit reached over 8.6% of GDP in 2024, one of the highest in the EU and nearly 70% higher compared to 2023, as spending increased by 19.1% to EUR 146.2 billion. Budget revenues increased by 10.4% y/y to RON 574.6 billion, driven mainly by insurance contributions, VAT, excise duties, payroll and income taxes, profit tax, and non-tax revenues, including the impact of September’s tax amnesty. EU reimbursements and grants totaled RON 42.62 billion in 2024, down 37% y/y. Total spending was 41.22% of GDP, up by 3.16 percentage points from the previous year. Social assistance accounted for 30.8% of spending, while staff expenses and goods and services costs made up 22.6% and 12.9%, respectively. Investments reached RON 120.21 billion, up 19.4% y/y, with non-refundable external financing covering 38.4% of total investment expenditure. The deficit is expected to remain high in 2025 and 2026. In 2025, the short-term costs of pension reform and a further rise in interest payments (projected at 2.2% of GDP in 2026, up from 1.4% in 2022) are likely to keep government expenditure growth elevated. Revenue growth is expected to stay strong, in line with economic activity (EU Commission). General government debt is projected to rise from 55.7% of GDP in 2024 to 63.1% in 2026, driven by high deficits and slower nominal GDP growth in the coming years. The country recorded the highest inflation rate in the EU in 2024, at 5.5%, still much lower than the double-digit figure recorded the previous here. Average HICP inflation is expected to decelerate further and eventually fall within the central bank's inflation target range of 2.5% ±1 percentage point, but not until the end of 2026.
An ageing population, the emigration of skilled labour, significant tax evasion, and insufficient health care 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 5.6% in 2024), Romania remains one of the poorest countries in Europe, with 32% of the population at risk of poverty or social exclusion (the highest ratio in the EU - data by the EU Commission). Labour market pressures have eased due to slower economic activity and a growing inflow of foreign workers. However, labour demand remains strong, and the unemployment rate is expected to decrease slightly. Nominal wages in both sectors grew at a double-digit rate in 2024, but wage growth is expected to moderate in 2025 and 2026 due to high minimum wage increases, lower inflation, and reduced labour market tightness. Lastly, the IMF estimated the country’s GDP per capita (PPP) at USD 47,203 in 2024, still below the EU average.
Main Indicators | 2023 (E) | 2024 (E) | 2025 (E) | 2026 (E) | 2027 (E) |
GDP (billions USD) | 351.07 | 380.56 | 406.20 | 431.68 | 453.11 |
GDP (Constant Prices, Annual % Change) | 2.1 | 1.9 | 3.3 | 3.7 | 3.7 |
GDP per Capita (USD) | 18,425 | 20,089 | 21,570 | 23,066 | 24,369 |
General Government Balance (in % of GDP) | -5.6 | -7.4 | -7.3 | -7.1 | -7.0 |
General Government Gross Debt (in % of GDP) | 52.1 | 55.7 | 59.7 | 63.1 | 66.7 |
Inflation Rate (%) | 10.4 | 5.3 | 3.6 | 3.3 | 3.0 |
Unemployment Rate (% of the Labour Force) | 5.6 | 5.6 | 5.4 | 5.2 | 5.1 |
Current Account (billions USD) | -24.49 | -28.53 | -28.45 | -28.73 | -28.43 |
Current Account (in % of GDP) | -7.0 | -7.5 | -7.0 | -6.7 | -6.3 |
Source: IMF – World Economic Outlook Database , October 2021
Country Risk
See the country risk analysis provided by La Coface.
