In 2020, Romania ranked 13th as its GDP accounted for 1.6% of European Union’s combined economy according to Eurostat data. Germany (25.1%), France (17.2%) and Italy (12.3%), accounted for over half (55%) of the bloc’s economy, followed by Spain (8.4%) and the Netherlands (6.0%).
Spain ranked ranked the 4th with a share of 8.4%, followed by the Netherlands (6.0%), Poland (3.9%), Sweden (3.5%) and Belgium (3.4%).
At the opposite end of the scale, ten EU Member States contributed less than 1% to the EU’s total GDP: Malta (which had the lowest share of EU GDP at 0.1%), Estonia, Cyprus and Latvia (all 0.2%), Croatia, Lithuania and Slovenia (all 0.4%), Bulgaria and Luxembourg (both 0.5%), and Slovakia (0.7%).
When comparing the GDP of 2019 and 2020 in the EU Member States, Spain took the biggest hit (-10.8%), followed by Greece (-9.0%), Italy (-8.9%), Portugal (-8.4%), Malta (-8.2%), Croatia (-8.1%) and France (-7.9%). The only EU country that registered an increase in GDP in 2020 was Ireland (+5.9%).
Last year, the gross domestic product (GDP) of the EU stood at around €13 400 billion at current prices. In real terms, the EU’s GDP in 2020 was 7.6% higher than its level a decade ago. However, real GDP was 5.9% lower than its level in 2019; it was the first drop in EU GDP since 2009, when GDP declined by 4.3% compared with 2008. The decrease in economic activity and consequently in GDP is consistent with the Covid-related restrictions implemented in 2020.
Romania’s economy contracted by 3.9% in 2020, one of the lowest contractions in the EU, and recovered strongly at 6.5% in the first half of 2021 on the back of better-than-expected second-quarter performance at 13.0 percent% (y-o-y). Private consumption recovered strongly in the first half of the year (up 5.2% y-o-y), led by robust demand for durable and household goods.
Increased business and consumer confidence also supported higher investment (up 11.9% y-o-y). New industrial orders recovered strongly, supporting industry’s rebound (up 10.4% y-o-y), and the information and communications technology sector (up 14.1% y-o-y) benefited from increased remote work needs. Strong economic recovery and labor supply constraints reduced unemployment to 5.2% in June 2021 from as high as 5.9% in January.
The Romanian gross domestic product advanced 7.4% year-on-year in Q3 of 2021, faster than a preliminary figure of a 7.2% growth. On a seasonally adjusted quarterly basis, the economy grew 0.4%, higher than an earlier estimate of a 0.3% expansion.
The World Bank classified Romania as a high-income country for the first time, based on 2019 data (per capita income of $12,610). However, the Covid-triggered crisis pulled the country back into the upper-middle-income group.
“In the medium to long term, Romania needs to address its structural constraints, including persistent twin deficits and high inequalities, as well as weak growth fundamentals stemming from low productivity and problems with both the quantity and quality of labor, due mainly to shortcomings in the quality and inclusiveness of education and shortages in critical skills” the World Bank said.