On May 9, it will be 20 years since the great enlargement of the EU – Romania and Bulgaria will enter three years later, in 2007.
A good moment to analyze the spectacular developments of Romania’s indicators since accession:
from GDP/capita to wages and purchasing power,
from European funds to the evolution of the Stock Exchange,
from the evolution of the degree of poverty to the growth rate of the economy.
In the last two decades, the level of GDP per capita increased strongly in most of the countries that joined the EU (2004-first wave, 2007-second wave of which Romania was also a part). Thus, GDP per capita, expressed at Purchasing Price Parity (PPP), doubled in Romania and Poland.
Slovakia has also achieved a remarkable performance, as GDP per capita is 75% higher than in 2004.
In Hungary, GDP per capita is 50% higher.
Slovenia and the Czech Republic gained 40%, but their starting point was the highest in CEE8. Furthermore, since 2008, nominal wages have grown at least twice as fast as the EU27 average.
Last year, Romania surpassed Hungary in GDP per capita (reported to Purchasing Power Parity – PPC), reaching 78% of the EU27 average compared to 76% that Hungary had, according to preliminary data from the office of statistics of the EU, Eurostat. Romania came much closer to Poland, which is at 80% compared to the EU average.
Below, the evolution of GDP/inhabitant at purchasing power parity, compared to the European average (European average = 100), for 4 CEE states:
It should be noted that Romania had a higher growth rate than even the other CEE states, starting from a very low base.
Thus, at the beginning of the accession negotiations, Romania had the lowest level of GDP per inhabitant in terms of purchasing power parity: only 26% of the average level of the EU.
In 2023, the country is three times better – almost 77% of the EU average.
Romania – net beneficiary of 65 billion euros of non-refundable European funds
These results are also due to the fact that the CEE region is a net beneficiary of the funds granted by the European Union.
From the moment of the accession of the countries that are part of the CEE until 2023, the funds received from the EU amounted to a total of 205 billion euros. In addition to monetary benefits, the EU offers harmonized regulations and a stable political and economic environment for businesses. The pillars of the single market (the free flow of goods, services, people and capital) mostly benefit everyday life.
In our case, from accession until now, Romania has received over 95 billion euros and contributed almost 30 billion euros. To these amounts are added the funds granted through the PNRR which support a good part of GDP growth through important investments.
Fast growing wages
Nominal wages in the region grew faster than those in the EU27, allowing for a reduction in wage gaps.
The biggest increase was in Romania, where they are 225% higher.
In Poland and Slovenia nominal wages almost doubled. They are also twice as high in the Czech Republic and Hungary compared to 2007.
The capitalization of the Bucharest Stock Exchange increased almost three times
BVB is approaching the fulfillment of the specific requirements to be included in the category of emerging markets in terms of stock market capitalization and free-float of MSCI, so there are prospects that during this year Romania will enter the monitoring list of the agency financial evaluation.
The stake of obtaining the new qualification is the access to funds of non-resident investors that are much more relevant at the global level and the transition of the Romanian capital market to a league with an exposure of an order of magnitude higher.
Poverty risk – drop from 43% to 30%
Although the situation has improved significantly in Romania in recent years, the population still faces major risks, with large differences between population categories or regions being noted.
The European Commission points out that, although the percentage of people at risk decreased by 12.1 percentage points from 2015, to 30.4% in 2023, it remains among the highest in the EU (32.5% vs. 21% in EU in 2022).
Although the percentages are still high in Romania for people at risk of poverty, there is a rapid downward trend and closeness to the European Union average, with the objective being that the share of this category should fall below 25% by 2030.
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