Half of the top 20 cities with the fastest economic growth are Polish, yet Romania stands out with two dynamic urban centers attracting investment and talent.
Introduction
According to an analysis by Oxford Economics, between 2010 and 2025, Iași and Bucharest rank among the fastest-growing cities in Central and Eastern Europe. This performance reflects both the dynamism of the private sector and local policies favorable to investment and innovation. The analysis emphasizes that half of the cities in the top 20 are from Poland, highlighting the overall strengthening of the region.
Romania’s Performance in the Regional Context
Central and Eastern Europe has stood out for closing the gap with Western European economies. Cities such as Warsaw, Krakow, or Gdańsk dominate regional rankings, yet the performance of Iași and Bucharest shows that Romania can compete in selected segments.
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Iași has experienced significant expansion in the IT&C sector, attracting multinational companies and local startups.
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Bucharest has benefited from economic diversification, serving as a hub for financial services, technology, and creative industries.
According to Oxford Economics data, productivity in these cities has steadily increased, and GDP per capita is gradually approaching the regional average.
Determinants of Growth
The analysis identifies several key factors:
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Productivity – adoption of modern technologies and improvement of business processes have accelerated economic performance.
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Foreign Direct Investment (FDI) – both Bucharest and Iași have attracted IT companies and BPO/SSC services, supported by educational infrastructure and local talent.
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Education and Human Capital – technical universities and professional training programs have supplied the workforce needed for dynamic industries.
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Local Business-Friendly Policies – tax incentives, business incubators, and support for startups have contributed to economic development.
Comparative example: productivity in Gdańsk increased from 24% to 36% of London’s level between 2010 and 2025, while Iași showed similar trends in the IT&C sector.
Challenges and Risks
Despite remarkable economic performance, Romanian cities face several challenges:
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Youth Migration – many specialists leave the country or move to European capitals for better opportunities.
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Urban Infrastructure – transportation, housing, and utilities must adapt to accelerated growth.
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Dependence on Specific Sectors – focusing on IT&C and services exposes the economy to vulnerability from external shocks.
Recommended public policies include investing in infrastructure, supporting innovation, and diversifying the urban economy to ensure long-term sustainability.
Perspectives and Strategies for Sustainable Development
To maintain growth:
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Integration of Digitalization and Green Technologies into traditional industries.
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Development of a Circular Economy to reduce ecological and social risks.
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Public-Private Collaboration for infrastructure and innovation projects.
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Education and Talent Retention through specialized programs and attractive conditions for young professionals.
Conclusion
The performance of Iași and Bucharest demonstrates that Romania has the capacity to develop urban centers competitive at the European level. With coherent policies and strategic investments, these cities can continue to attract investment, develop high-quality human capital, and transform current challenges into opportunities for sustainable economic development.
