Romania’s GDP could reach 700 billion euros in the next 10 years, which is 30 times higher than in 1994, according to a recent report.
Romania’s economy could double over the next decade, with GDP reaching 700 billion euros, growing at an average annual rate of 3.0 – 3.5%, with a similar average inflation rate, according to an analysis by ING’s macroeconomists.
One of the conditions necessary to achieve these projections is the absorption and efficient use, in the coming years, of the 28 billion euros available through the National Recovery and Resilience Plan.
Over the past three decades, Romania’s economic growth has led to remarkable performances compared to other European countries. For example, while Romania’s GDP in 1994 was three times smaller than that of Portugal, by 2024 Romania’s economy is estimated to surpass Portugal’s GDP by approximately 30%.
The transition to a market economy between 1990-2000, the economic boom between 2000 and 2008 (with an average annual GDP growth of 6.1%), the financial crisis and subsequent economic recovery (2009-2014), post-crisis expansion (2014-2020), and post-pandemic recovery (2021-2024) have been key stages in Romania’s economic development over the last 30 years.
The analysis reveals that after 2000, capital income (profits, rents, dividends, asset appreciation) grew at a faster rate than labor income, despite rising wages. Thus, Romania’s accession to the European Union brought significant prosperity to capital owners and real estate investors.
The number of employees in Romania has decreased by more than 20% over the past 30 years due to the restructuring of large state-owned companies and the external migration of over 3.6 million Romanians. The lowest number of employees was recorded in 2011, when the effects of the 2008-2009 financial crisis were fully felt, with Romania having only 4.3 million employees. By 2024, the number of employees reached a 25-year high, with 5.16 million employees by mid-year.
The average net monthly salary has increased about 14 times in the last 30 years, from the equivalent of 72 euros in 1994 to over 1,000 euros in 2024.
Education and healthcare, two essential sectors
Education and healthcare, vital sectors for Romania’s development, have undergone radical changes over the past three decades, but underfunding in these areas has negatively impacted performance indicators. For example, in 1994, the functional illiteracy rate among middle school graduates was around 10%, much lower than the current rate of about 40%-50%. This trend is partly due to Romania never allocating 6% of its GDP for education, as required by law. The closest it came was in 2008, when Romania allocated 4.3% of GDP, compared to the European Union average of 4.8%.
On the other hand, public spending on healthcare has increased at a faster pace. In 1994, public healthcare expenditures represented about 2% of GDP (compared to the European average of 6%), but in recent years they have reached around 5%. Consequently, life expectancy has increased from 69 years in 1994 to 76 years in 2024, though it remains below the EU average, which exceeds 80 years.
