Significant GDP growth in Romania
Experts say that Romania’s GDP is now higher than Poland’s
Bogdan Matei, 07.02.2025, 14:00
Romania surpassed Poland in terms of GDP per capita adjusted for purchasing power parity, according to data presented by Ionuţ Dumitru, professor at the Academy of Economic Studies in Bucharest. During a conference organized by the Concordia Employers’ Confederation, the expert said that this economic performance places Romania not only above Poland, the largest country in the region, but also above other neighbours, such as Hungary, Bulgaria, Slovakia, Croatia or Greece.
The rapid growth of the Romanian economy has been supported by several factors, including: consistent flows of foreign investments, favourable fiscal policies and rapid development in strategic sectors, as well as the significant increase in wages in recent years. The high inflation, determined by the increase in costs in the post-pandemic period, led to a rapid growth of the nominal Gross Domestic Product per capita, which has increased by an average of 11% per year in the last 5 years. According to the latest data, this indicator has exceeded 80% of the European Union average. Thus, Romania has quickly recovered the economic gaps compared to Western Europe, approaching the EU average.
The flat tax system had a positive effect on the GDP growth – according to a study carried out by experts from the Academy of Economic Studies, at the request of Concordia. Based on calculations, the specialists claim that a tax system based on progressive quotas would not significantly increase the revenues to the state budget. Ionuţ Dumitru even says that the income tax regime remains one of the few competitive advantages that Romania still has, compared to the states in the region. The decision regarding the tax reform is eminently political, and the discussions are more ideological and less based on numbers and serious analysis – says Professor Dumitru. In his opinion, Romania can pass to a progressive taxation when it becomes a truly rich country, because there is still a gap to recover compared to western standards.
For his part, the executive director of Concordia, Radu Burnete, said that the business environment does not want to change the flat tax system. The president of Concordia, Dan Şucu, also stated that entrepreneurs and the business environment need a predictable and sustainable fiscal system, capable of ensuring prosperity at the level of the entire society, in the medium and long term. “With a tax burden on labour of over 40% in Romania, any increase in taxes will have a negative impact on citizens’ incomes, consumption and, implicitly, the GDP. The budget deficit cannot be fixed with tax increases, and even less progressive taxation, but with systemic reforms to make the state administration and tax collection more efficient” – said Şucu, in a press release issued by the employers’ organization he leads. (MI)
