Romania’s economic gap against EU countries is lower, but the ratio between gross national income and GDP has deteriorated – BNR official says

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Romania’s economic gap against the EU countries has decreased, but the ratio between the gross national income and GDP has deteriorated over the past 17 years, according to a presentation by Deputy Governor of the National Bank of Romania (BNR) Florin Georgescu.

“Over the past 17 years, convergence in terms of GDP per capita has accumulated 33 percentage points (from 26% of the EU average in 2000 to 59% of the EU average in 2016), the second largest increase in former communist states after Lithuania (+38 pp). The ratio of the gross national income, which represents the value added by Romanians in the country and abroad, and the GDP, which expresses the gross added value obtained in the country by Romanians and foreigners, has decreased by 1.8 percentage points (pp), from 99.3% in 2000 to 97.5% in 2016 ,” the document reads.

According to Georgescu, the evolution is similar to that of Lithuania (-1.7 pp) and Poland (-2.6 pp), but weaker than that of Hungary (+2.8 pp).

“However, the steady progress in the volume of economic activity has been characterized by a relatively modest degree of inclusion. Real convergence was only marginally reflected in the increase in the number of employees and partly in their purchasing power gains. The number of employees has increased during 2000-2016 by only 2.2% (+100 thousand people), from 4.6 million people to 4.7 million people. The employees’ purchasing power has increased by 20 percentage points (from 22% in 2000 to 42% in 2016), as compared to over 30 pp in terms of volume of work, given that labour remuneration has increased from 9% of the EU average in 2000 to 22% of the EU average in 2016 (+13 pp), and the price level evolved from 40% of the EU average in 2000 to 52% of the EU average in 2016 (+12 pp),” the document reads.

The evolution of the employees’ purchasing power, from regional perspective, was relatively similar.

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