Romania set to overtake wealthier peers

Romania is poised for an economic comeback that may see it overtaking peaking surrounding nations in 2023. This possibility is aided by its access to European Union funding, recent trend of currency stability and a marked growth in foreign direct investment brought about partly by the movement of manufacturing into the country by companies leaving Russia and Ukraine because of the ongoing conflict.

The International Monetary Fund predicts that’s Romania’s economy would record a 3.1% expansion. The European Commission projects a much more modest 1.8% growth forecast, which would still place the country well ahead of Poland (projected to grow 0.7%) and Hungary, which is currently struggling with an economic slowdown and rapidly-rising inflation.

This positive outlook follows about a decade of gradual gains which has seen the nation long-known as one of Europe’s poorest (setback by a history of grave corruption) slowly close the gap on its contemporaries to become eastern Europe’s second-largest economy after Poland.

Based on the results of recent analyses, GDP per capita measured in terms of purchasing power reached 74% of the European Union average in 2021, a 21% point gain compared to 2010.

To put this in perspective, an average citizen would now only have to part with about 20 months’ net income to purchase a new Dacia Jogger car, equalling a citizen in Hungary, which is generally known to be a wealthier economy.

This transition economically has survived Romania’s history of political unrest, which escalated into a full-blown collapse of its governance structure in 2021. Romania’s positive projections have not gone unaided by its EU membership and amiable relations with Brussels.

While the dispute continues between Budapest, Warsaw and the European Union over rule-of-law requirements tied to the billions provided in pandemic recovery facility, Romania has currently accessed ore than 6 billion euros in grants and discount loans.

Romania’s Prime Minister Nicolae Ciuca has indicated that the government plans to access over 10 billion euros a year (about 4% of GDP) from about 90 billion euros in EU funding made available to Bucharest until 2027.

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