Romania: Economic and Political Overview
In this page: Economic Indicators | Foreign Trade in Figures | Sources of General Economic Information | Political Outline
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 , Latest available data
Note: (e) Estimated Data
Romania has a labour force of 8.28 million people out of its 19.06 million population, though this number has been decreasing over the last decade due to the massive migration of Romanian workers to Western European countries. Agriculture represents around 4.5% of Romania's GDP and employs 18% of the country's active population (World Bank, latest data available). The main resources and agricultural production in Romania are cereals, sugar beets, and potatoes. However, production remains very low compared to the country's potential capacity (more than one-third of the land is arable). About 25% of the country is covered by forests (especially around Transylvania), and the logging industry is developing very fast. Romania has limited energy dependence thanks to coal, oil, gas, and uranium reserves. According to data from Eurostat, Romania is the seventh-biggest agricultural producer in the European Union: in 2023, the country’s agricultural output reached EUR 16.6 billion, marking a 14% y-o-y increase. This was the second-largest rise in agricultural production value in the EU, representing 6% of the total EU agricultural output (data EU Commission).
The industrial sector contributes 26.7% of the country's GDP and employs one-third of the active population. Thanks to inexpensive labour, its industry is diversified and competitive. Historically, manufacturing companies and the industrial sector represent the backbone of Romania's economy. For this reason, foreign direct investors are involved in heavy industry (metallurgy, steel), the manufacturing of vehicle parts, building and construction, petroleum refining, and textiles. According to figures from the World Bank, the manufacturing sector alone contributes 13% of GDP. Data from the national statistical office show that, in 2024, Romania's industrial output decreased by 1.5% year-on-year, following a 3% contraction one year earlier. The utilities sector weighed down overall performance with a 4.7% decline, while core manufacturing output dropped by 1.1% y/y in 2024. Despite the negative trend, some industries showed positive results: food manufacturing (+6.7% y/y), chemistry (+8.7% y/y), oil refining (+7.7% y/y), paper manufacturing (+8.7% y/y), and the production of transport means other than automobiles (+12.4% y/y). Notably, despite a record number of automobiles produced, the sector's industrial output fell by 5.7% y/y.
Romania's economy is mainly centred on the services sector, which represents 60.7% of GDP and employs around 48.9% of the nation's workforce. Tourism, in particular, has been booming in recent years: the number of tourists visiting the country in 2024 rose 4.5% on the year, reaching 14.26 million (data INSEE). The technology sector has also seen consistent growth in recent years, due to the emergence of a highly qualified workforce whose cost is lower than the European average. Romania's ITC sector accounts for around 8% of GDP (Romanian Software Industry Association). The Romanian banking sector comprises 32 credit institutions: two banks with full or majority Romanian state-owned capital, four credit institutions with majority domestic, and private capital, 18 banks with majority foreign capital and eight branches of foreign banks. About 65.6% of the Romanian banking sector’s assets are held by institutions with foreign capital (European Banking Federation). The retail sector is also important, with sales increasing by 8.6% y-o-y in volume terms in 2024, driven by the double-digit (+14.8%) rise in non-food sales (INSEE).
| Breakdown of Economic Activity By Sector | Agriculture | Industry | Services |
|---|---|---|---|
| Employment By Sector (in % of Total Employment) | 17.9 | 33.2 | 48.9 |
| Value Added (in % of GDP) | 3.9 | 26.7 | 60.7 |
| Value Added (Annual % Change) | 9.6 | 1.3 | 2.0 |
Source: World Bank - Latest available data.
Find more information about your business sector on our service Market Reports.
| Monetary Indicators | 2016 | 2017 | 2018 | 2019 | 2020 |
|---|---|---|---|---|---|
| Romanian New Leu (RON) - Average Annual Exchange Rate For 1 MUR | 0.11 | 0.12 | 0.12 | 0.12 | 0.11 |
Source: World Bank - Latest available data.
Find out all the exchange rates daily on our service Currency Converter.
The Economic freedom index measure ten components of economic freedom, grouped into four broad categories or pillars of economic freedom: Rule of Law (property rights, freedom from corruption); Limited Government (fiscal freedom, government spending); Regulatory Efficiency (business freedom, labour freedom, monetary freedom); and Open Markets (trade freedom, investment freedom, financial freedom). Each of the freedoms within these four broad categories is individually scored on a scale of 0 to 100. A country’s overall economic freedom score is a simple average of its scores on the 10 individual freedoms.
Economic freedom in the world (interactive map)
Source: Index of Economic Freedom, Heritage Foundation
The business rankings model measures the quality or attractiveness of the business environment in the 82 countries covered by The Economist Intelligence Unit’s Country Forecast reports. It examines ten separate criteria or categories, covering the political environment, the macroeconomic environment, market opportunities, policy towards free enterprise and competition, policy towards foreign investment, foreign trade and exchange controls, taxes, financing, the labour market and infrastructure.
Source: The Economist Intelligence Unit - Business Environment Rankings 2020-2024
See the country risk analysis provided by Coface.
Romania is open to foreign trade, which represents 83% of its GDP (World Bank, latest data available). The country mainly exports machinery and transport equipment (44.8% of total exports in 2023, mostly cars), manufactured goods classified mainly by raw materials (15.9%), miscellaneous manufactured articles (13.9%), and food and live animals (8.2%). Imports are led by machinery (36.8%); mineral products; chemical products; and base metals (data INSEE 2023).
The European Union is the main trading partner, accounting for 72.6% of total exports and 73.3% of imports in 2023. The leading countries for exports are Germany (20.8%), Italy (10.2%), France (6.3%), Hungary (5.7%), and Bulgaria (4.2%); whereas imports are led by Germany (19.4%), Italy (8.7%), Hungary (6.5%), Poland (6.2%), and China (5.5% - data Comtrade).
Romania’s foreign trade figures for 2023 published by WTO show that merchandise exports amounted to USD 100.6 billion (+4% year-on-year), while imports decreased to USD 131.9 billion (-0.4%). On the other hand, the country is a net exporter of commercial services, with exports totalling USD 42.8 billion against USD 28.4 billion in imports (+10.4% and +13.4%, respectively). Overall, Romania has a structurally negative trade balance: in 2023, it stood at around 4.8% of the country’s GDP (from 6.9% one year earlier - World Bank). According to preliminary figures from the national statistical office INSEE, in 2024, Romania's trade deficit expanded by 15.3% in 2024, reaching EUR 33.39 billion (USD 34.4 billion). FOB exports slipped by 0.4% to EUR 92.69 billion, while CIF imports rose by 3.3% to EUR 126.08 billion. Machinery and transport equipment dominated trade, representing 47% of exports and 36.4% of imports, with other manufactured goods accounting for 28.5% of exports and 28.6% of imports.
| Foreign Trade Indicators | 2019 | 2020 | 2021 | 2022 | 2023 |
|---|---|---|---|---|---|
| Imports of Goods (million USD) | 96,544 | 92,132 | 116,203 | 132,468 | 131,912 |
| Exports of Goods (million USD) | 76,871 | 70,718 | 87,388 | 96,699 | 100,612 |
| Imports of Services (million USD) | 20,614 | 16,364 | 21,800 | 25,067 | 28,440 |
| Exports of Services (million USD) | 30,302 | 27,165 | 32,914 | 38,758 | 42,797 |
| Imports of Goods and Services (Annual % Change) | 8.8 | -5.2 | 14.6 | 9.3 | -1.1 |
| Exports of Goods and Services (Annual % Change) | 5.4 | -9.5 | 12.6 | 9.3 | -0.8 |
| Imports of Goods and Services (in % of GDP) | 44.3 | 41.2 | 46.1 | 50.3 | 43.9 |
| Exports of Goods and Services (in % of GDP) | 40.1 | 36.8 | 40.5 | 43.4 | 39.2 |
| Trade Balance (million USD) | -19,960 | -21,676 | -27,291 | -33,614 | -31,328 |
| Trade Balance (Including Service) (million USD) | -10,282 | -10,875 | -16,177 | -19,923 | -16,940 |
| Foreign Trade (in % of GDP) | 84.4 | 77.9 | 86.6 | 93.6 | 83.1 |
Source: WTO – World Trade Organisation ; World Bank , Latest Available Data
| Main Customers (% of Exports) |
2023 |
|---|---|
| Germany | 20.8% |
| Italy | 10.2% |
| France | 6.3% |
| Hungary | 5.7% |
| Bulgaria | 4.2% |
| See More Countries | 52.8% |
| Main Suppliers (% of Imports) |
2023 |
|---|---|
| Germany | 19.4% |
| Italy | 8.7% |
| Hungary | 6.5% |
| Poland | 6.2% |
| China | 5.5% |
| See More Countries | 53.7% |
Source: Comtrade, Latest Available Data
Source: Comtrade, Latest Available Data
To go further, check out our service Import-Export Flows.
| 35.2 bn USD of services exported in 2022 | |
|---|---|
| 30.24% | |
| 27.86% | |
| 23.51% | |
| Miscellaneous business,...Miscellaneous business, professional, and technical services | 21.24% |
| Research and developmentResearch and development | 2.27% |
| 13.71% | |
| 2.48% | |
| 1.04% | |
| 0.57% | |
| 0.27% | |
| 0.21% | |
| 0.12% | |
| 24.9 bn USD of services imported in 2022 | |
|---|---|
| 31.40% | |
| 25.30% | |
| Miscellaneous business,...Miscellaneous business, professional, and technical services | 23.86% |
| Research and developmentResearch and development | 1.45% |
| 19.45% | |
| 15.86% | |
| 3.84% | |
| 2.33% | |
| 0.95% | |
| 0.33% | |
| 0.30% | |
| 0.24% | |
Source: United Nations Statistics Division, Latest Available Data
The world rankings, published annually, measures violations of press freedom worldwide. It reflects the degree of freedom enjoyed by journalists, the media and digital citizens of each country and the means used by states to respect and uphold this freedom. Finally, a note and a position are assigned to each country. To compile this index, Reporters Without Borders (RWB) prepared a questionnaire incorporating the main criteria (44 in total) to assess the situation of press freedom in a given country. This questionnaire was sent to partner organisations,150 RWB correspondents, journalists, researchers, jurists and human rights activists. It includes every kind of direct attacks against journalists and digital citizens (murders, imprisonment, assault, threats, etc.) or against the media (censorship, confiscation, searches and harassment etc.).
The Indicator of Political Freedom provides an annual evaluation of the state of freedom in a country as experienced by individuals. The survey measures freedom according to two broad categories: political rights and civil liberties. The ratings process is based on a checklist of 10 political rights questions (on Electoral Process, Political Pluralism and Participation, Functioning of Government) and 15 civil liberties questions (on Freedom of Expression, Belief, Associational and Organizational Rights, Rule of Law, Personal Autonomy and Individual Rights). Scores are awarded to each of these questions on a scale of 0 to 4, where a score of 0 represents the smallest degree and 4 the greatest degree of rights or liberties present. The total score awarded to the political rights and civil liberties checklist determines the political rights and civil liberties rating. Each rating of 1 through 7, with 1 representing the highest and 7 the lowest level of freedom, corresponds to a range of total scores.
Political freedom in the world (interactive map)
Source: Freedom in the World Report, Freedom House
Any Comment About This Content? Report It to Us.
© eexpand, All Rights Reserved.
Latest Update: March 2025
