CEE countries progress towards OECDReading Time: 2 minutes
Romania’s GDP should grow 4.5% both this year and next, after a 6.3% expansion last year, according to a report released Friday by the Organisation for Economic Co-operation and Development (OECD).
The positive projection came three days after Romania, Bulgaria and Croatia were announced as the three Central and Eastern Europe (CEE) states approved for accession discussions by the OECD. Each of the three EU member states will now receive individual roadmaps based on the Paris-based organisation’s values of improving the economic and social conditions of people worldwide. Peru, Argentina and Brazil will also commence the process, the OECD announced.
According to OECD’s “Economic Snapshot“, Romania has one of the best economic trajectories in the 21st Century, and after two decades of strong economic performance, which saw Romania’s per capita GDP rise to over 60% the OECD average – massively up from around just 30% in the early 2000s.
Productivity in Romania is currently about two-thirds of the OECD average, and its continued growth should be in focus. The OECD also recommended improving state bureaucracy and the rule of law, alongside pension reforms and improved job creation and training.
The COVID-19 crisis hit Romania hard, however, and the OECD report recommended accelerated structural reforms as well as effective disbursement of EU money – including NextGeneration funds – and overall fiscal management, to further strengthen Romania’s recovery and growth.
At around 40%, Romania’s COVID:19 vaccination rate is among Europe’s lowest, but the country’s economic resilience during the pandemic has nevertheless been impressive, the OECD said. Implementation of its EU-funded Recovery and Resilience Plan is important, but a key focus should be increasing its vaccination rate, it added.
With inflation rising, monetary policy should keep tightening and a credible medium-term consolidation plan should be put in place to ensure a gradual reduction of the budget deficit. Investing in the green and digital transitions would also raise Romania’s growth potential while helping to move closer to its climate targets, the Paris-based organisation underlined.
The OECD currently has 38 members, 9 of whom are in CEE: Austria, Czechia, Estonia, Hungary, Latvia, Lithuania, Poland, Slovakia and Slovenia.