Romania’s Economic Growth: Jobs, Competitiveness & Stability

Romania has experienced significant economic growth in recent decades and is on track for continued progress, though ongoing reforms are needed to address inflation and strengthen its economy, according to a new report by the Organisation for Economic Co-operation and Development (OECD).

Economic Outlook for Romania

The OECD’s economic survey of Romania projects GDP growth of 1.0% this year, increasing to 2.2% in 2026, following 0.7% growth last year. Inflation is expected to remain elevated at 6.6% in 2026 before decreasing to 3.0% in 2027.

“Romania has seen strong revenue growth, driven by significant increases in productivity,” said OECD Secretary-General Mathias Cormann, presenting the report in Bucharest alongside Romanian Prime Minister Ilie Bolojan. “Looking ahead, strong fiscal discipline must remain a priority to address persistent inflation and rising spending pressures from an aging population.”

The report emphasizes the importance of stimulating innovation, skills, and digitalization to bolster competitiveness. Reforms in health, the labor market, and skills policies are recommended to increase employment rates among older workers, women, and young people.

Public Finances and Competitiveness

Improving spending efficiency is crucial for sound public finances and sustained economic growth. Broadening the tax base and enhancing tax compliance through digitalization and risk-based audits would contribute to fiscal sustainability. Medium-term budgetary planning, based on performance-oriented budgeting and expenditure reviews, is also advised.

To unlock its economic potential, Romanian businesses need greater integration into global supply chains. Simplifying and digitizing regulatory frameworks for economic activities would reduce administrative costs and promote business dynamism. Incentives for research and development, particularly for small and medium-sized enterprises, should be improved to stimulate innovation.

Labor Force Participation and Climate Resilience

Increasing labor force participation among older workers, women, and young people is vital to mitigate demographic challenges. Promoting healthy aging, lifelong learning, and flexible work arrangements would enhance the employability of older workers. Expanding childcare services, shortening parental leave, and addressing workplace discrimination would encourage greater female participation in the labor market. Effective active labor market policies are also needed to support youth employment.

Romania faces significant threats from climate change, particularly from floods and droughts. Strengthening regulations against construction in flood-prone areas, improving flood protection systems, and expanding disaster insurance coverage would enhance resilience to flood risks. Modernizing infrastructure to prevent water losses and updating wastewater treatment practices will help address water scarcity.

See the Overview of the Economic Report for Romania.

The OECD is an international organization dedicated to improving the economic and social well-being of people worldwide. It provides a platform for governments to collaborate, share experiences, and find solutions to economic, social, and governance challenges.

The OECD comprises 38 member countries: Australia, Austria, Belgium, Canada, Chile, Colombia, Costa Rica, the Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Israel, Italy, Japan, Korea, Latvia, Lithuania, Luxembourg, Mexico, the Netherlands, New Zealand, Norway, Poland, Portugal, the Slovak Republic, Slovenia, Spain, Sweden, Switzerland, Turkey, the United Kingdom, and the United States.

Romania is currently engaged in accession talks with the OECD, along with Argentina, Brazil, Bulgaria, Croatia, Indonesia, Peru, and Thailand. Accession talks with Romania began in early 2022, and a Roadmap for the process was adopted on June 10, 2022, outlining the terms and conditions for Romania’s membership.