Romania has experienced strong growth over the past two decades, with incomes and productivity converging towards OECD levels. Continued reforms to improve public finances, strengthen competitiveness and promote workforce participation are needed to boost Romania's growth prospects and living standards further, according to a new OECD report.
The OECD Economic Survey of Romania projects GDP growth to reach 1.0% this year before rising to 2.2% next year, after growth of 0.7% last year. Inflation is expected to remain elevated at 6.6% in 2026 before declining to 3.0% in 2027 as the impact of past tax measures fades.
"Romania has achieved high income growth, driven by significant productivity gains. Looking ahead, strong fiscal discipline needs to remain a priority to address persistent inflation and rising spending pressures from population ageing," OECD Secretary-General Mathias Cormann said, presenting the Survey in Bucharest alongside Romania's Prime Minister Ilie Bolojan. "Boosting innovation, skills and digitalisation will be important to strengthen competitiveness. Reforms to health, labour market and skills policies would facilitate higher employment rates among older workers, women and young people."
Improving spending efficiency remains a priority for ensuring sound public finances and supporting resilient growth. Continuing efforts to broaden the tax base and improving tax compliance through further digitalisation and risk-based audits would help contribute to fiscal sustainability. As further consolidation efforts are required beyond 2026, medium-term budget planning, based on performance-based budgeting and spending reviews, would help ensure fiscal discipline and effective allocation of public funds.
Better integration of Romanian enterprises into global supply chains is needed to unlock economic potential. Further efforts to simplify and digitalise business licensing frameworks would lower administrative costs and foster business dynamism. Improved research and development incentives, especially for small and medium-sized enterprises, would spur innovation. Investing in human capital, including by fully implementing the comprehensive education reform and better aligning vocational education and training with labour market needs, would help increase the supply of advanced skills needed to move further up the value chain.
Raising the labour market participation of older workers, women and young people would help mitigate demographic challenges due to population ageing and emigration. Healthy ageing - through preventative care, early detection and the promotion of healthier lifestyles - as well as lifelong learning and flexible work arrangements would boost older workers' employability. Improved return-to-work incentives after giving birth, such as expanded childcare and shorter parental leave, and new workplace anti-discrimination measures would encourage women's labour force participation. More effective active labour market policies, including better outreach to inactive young people and access to job-relevant training, would further support youth employment.
Climate change poses a significant threat to Romania, particularly through floods and droughts. Better enforcement of rules against construction in flood-prone areas, improved flood defence systems, and expanded disaster insurance coverage would increase resilience to risks. Modernising infrastructure to prevent water loss and inefficient irrigation, along with updating wastewater treatment practices, will help address water scarcity concerns.
