Presentation - Economic Survey of Romania 2024

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Sustaining income convergence @OECD @OECDeconomy
12 March 2024 oe.cd/romania OECD ECONOMIC SURVEY OF ROMANIA
Bucharest
Real GDP growth
-4 -2 0 2 4 6 8 2018 2019 2020 2021 2022 2023 2024 2025 %
The economy is proving resilient
Source: National Institute of Statistics and OECD projections.

Living standards have been catching up

Note: OECD is a weighted average. Real GDP is based on 2015 prices and in purchasing power parity.

Source: OECD National Accounts database.

Real GDP per capita
0 10 20 30 40 50 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 USD, thousands Romania OECD
Headline consumer price inflation Year-on-year
0 2 4 6 8 10 12 14 16 18 2019 2020 2021 2022 2023 2024 % Romania OECD
Inflation has further to fall
Source: OECD Price Statistics database and National Institute of Statistics.

Restrictive monetary policy remains appropriate

Policy interest rates

Source: National Bank of Romania and ECB. 0 1 2 3 4 5 6 7 8 2020 2021 2022 2023 2024 % Romania Euro area

A period of moderate growth will help lower inflation

Real GDP growth, % 4.1 2022 2023 Consumer price inflation, % 13.8 2.1 5.0 10.4 5.6 5.5 5.6 Unemployment rate, % 2024 3.1 3.7 5.4 2025 3.3
114
Source: OECD Economic Outlook No.
database and updated OECD projections.

Stabilising public finances

Stabilising public debt requires fiscal consolidation

Note: The graph shows general government gross financial liabilities, Maastricht definition.

8
Government gross debt
Source:
0 10 20 30 40 50 60 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 % of GDP
OECD Analytical database.

Recent pension reforms will encourage Romanians to stay in work longer

Employment rates of older workers 2022

0 10 20 30 40 50 60 70 80 90 % of population 60-64 65-69
Note: OECD is a weighted average. Source: OECD Labour Force Statistics database.

Higher tax revenues are needed to fund priority spending

Tax revenues

2022 or latest available year

Note: OECD is an unweighted average.

Source: OECD Revenue Statistics, OECD National Accounts database and OECD calculations.

0 5 10 15 20 25 30 35 40 45 50 % of GDP

Stronger tax enforcement will improve revenue raising capacity

Value added tax gap

2021, % of estimated total VAT liability

Note: VAT gap estimates the difference between VAT revenue that would be collected with full compliance and actual VAT receipts. The VAT gap covers revenues lost to fraud and evasion but also insolvencies, administrative errors and legal tax optimisation. Statistical and measurement discrepancies can give rise to negative values in countries such as the Netherlands where non-compliance is very low.

Source: European Commission.

-5 0 5 10 15 20 25 30 35 40

Lifting productivity

Fostering the private sector will reinvigorate
Labour productivity growth 3-year moving average
Source: OECD Productivity
-2 0 2 4 6 8 10 12 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 % Romania OECD
slowing productivity growth
Note: Labour productivity is measured as real gross domestic product per hour worked. OECD is a weighted average.
database.

Strengthening the capacity of the public administration to make full use of EU funds

Total allocation of EU funds

Note: “Cohesion Policy” refers to the European Social Fund, European Regional Development Fund, Cohesion Fund, and support for the European Territorial Co-operation. The graph shows total allocations over 2021-27. “RRF Grants” shows maximum grant allocations from Recovery and Resilience Facility over 2021-26.

Source: OECD calculations based on European Commission data as of 8 December 2023.

As a % of 2020 GDP
0 5 10 15 20 25 Cohesion policy Recovery and Resilience Facility Grants

Enhancing lobby control can improve the rule of law

Control of corruption

Scale: -2.5 (worst) to 2.5 (best), 2022

Note: OECD is an unweighted average.

Source: World Bank, Worldwide Governance Indicators.

-2.5 -2.0 -1.5 -1.0 -0.5 0.0 0.5 1.0 1.5 2.0 2.5

Improving economic opportunity

The tax and transfer system can do more to reduce poverty

Persons at risk of poverty or social exclusion

Note: A person “at risk of poverty or social exclusion” has a low disposable income, is materially deprived, or lives in a household where adults are not working or working very little. Source: Eurostat.

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0 10 20 30 40 50 2015 2016 2017 2018 2019 2020 2021 2022 % of population Romania Czechia Hungary Poland

Female employment has risen but not far enough

Female employment

% of women aged 15-64

Highest five EU OECD countries

Note: “Highest five EU OECD countries” is an unweighted average of results for the five EU-OECD countries with the highest female employment rates. In 2022, those countries were Denmark, Estonia, Finland, the Netherlands and Sweden.

Source: Eurostat.

0 10 20 30 40 50 60 70 80 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Romania

More childcare places would support workforce participation

Public spending on early childhood education and care 2019 or latest available

Note: Data for Romania are not adjusted for differences in the entry age for primary schooling and cover all public expenditure on childcare and pre-primary education regardless of the age of those enrolled. OECD is an unweighted average. Source: OECD Family Database.

0.0 0.2 0.4 0.6 0.8 1.0 1.2 1.4 1.6 1.8 % of GDP

Accelerating the net zero transition

Abatement action must pick up to reach net zero emissions

Note: The dashed line shows projected emissions under current and planned policies.

Source: OECD Environment Statistics database and OECD calculations based on Romanian Ministry of Environment projections.

Net greenhouse gas emissions
0 50 100 150 200 250 1990 2000 2010 2020 2030 2040 2050 Mt CO2 eq. Net zero path Projected emissions

More green power is needed to replace fossil fuels

Note: For 2030, the figure shows estimated renewable electricity generation required to stay on track for net-zero emissions by 2050.

Source: IEA Renewables Information Database and Government of Romania.

Net capacity of renewable electricity plants Gigawatts
0 5 10 15 20 25 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2030 Hydro Solar Wind

Higher and more consistent carbon pricing would incentivise emissions reductions

Implicit carbon prices in energy taxes 2021

Note: Implicit carbon taxes are calculated as the ratio of revenue from taxes on energy (including explicit carbon taxes as applicable) to greenhouse gas emissions from fuel combustion. Estimates exclude prices emerging in the EU Emission Trading System.

Source: IEA World Energy Balances database.

0 50 100 150 200 250 EUR / tCO2

Retrofitting support will help households to save energy

Note: The graph shows unit consumption of energy for space heating in buildings. Data are adjusted to correct for climate variation across countries and years.

Source: Odysee-Mure.

Heating consumption 2021
0 2 4 6 8 10 12 14 16 18 Kg of oil equivalent per square metre

Enforcing strict land-use rules would limit exposure to climate -related risks

Note: This indicator presents the share of the population exposed to river flooding with a 10-year return period. A return period is the average or estimated time in which a flood event is likely to recur.

Source: Maes, M. J. A., et al. (2022), "Monitoring exposure to climate-related hazards: Indicator methodology and key results“.

Share of the population exposed to river flooding every 10 years
0 5 10 15 20 25

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Disclaimers:

The statistical data for Israel are supplied by and under the responsibility of the relevant Israeli authorities. The use of such data by the OECD is without prejudice to the status of the Golan Heights, East Jerusalem and Israeli settlements in the West Bank under the terms of international law. This document and any map included herein are without prejudice to the status of or sovereignty over any territory, to the delimitation of international frontiers and boundaries and to the name of any territory, city or area.

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