In recent years, Bucharest has been one of Europe’s strongest performing cities in terms of GDP growth, in part reflecting the city’s favorable sectoral mix. The city has demonstrated particular strength in business services and IT&C, the latter of which has been an especially important driver for employment growth. According to Oxford Economics, Bucharest maintained its momentum in 2016, with GDP and employment growth at 6.8 percent and 2.3 percent respectively, both stronger than the EU city average.
”The only way Bucharest can overcome its crippling shortages and support future growth is by turning its transport infrastructure based on an effective smart city strategy, as it is a major driver of sustainable economic growth.
Romania’s capital should use digital technology for developing smarter urban transport networks, upgrading utilities and using resources more efficiently, following the lead of other modern cities, some of them in Romania. The citizens of Bucharest need a more accessible and involved city administration that works so that the city meets the needs of its people better, offers adequate public safety and the trust that this is a place where people can live in the future as well”, Carmen Adamescu, Partner EY Romania commented.
Economic growth is expected to remain very strong at 5.4 percent in 2017, meaning that the city will comfortably outperform the European city average. Employment growth is forecasted to ease to 1 percent in 2017, but still support a fall in the unemployment rate to 3.9 percent.
The rate of job creation over the medium term will be hampered by a declining working age population, which at an average annual rate of -0.8 percent over the period 2017-2021 will significantly underperform the EU city average. Despite this, annual average GDP growth over the period of 2017-2021 is forecasted to remain above the EU city average at 2.7 percent, with business services providing the main impetus behind this expansion.
The data compiled by Oxford Economics shows that the citizens of Bucharest had a higher disposable income per capita in 2016 than those of Sofia, Budapest and even Warsaw, exceeding EUR 10,000. However, the disposable income per capita is still well behind the EU city average, of EUR 20,000.