Dan Pălăngean

Senior Expert, National Bank of Romania

GfK: Romania, 51% below the European Purchasing Power Average in 2022

Romania had a spending potential of €8,017 per capita in 2022. This is 51% below the European average and puts the Romanians in 31st place. Compared to the previous year, the gap between counties with high and low purchasing power has widened even further.In the top 10 ranking, Bucharest is clearly leading the field with a per capita purchasing power of €15,482. This means that the inhabitants of the capital have more than 93% more purchasing power than the national average and 3.6 times more than the inhabitants of Vaslui County, which has the lowest purchasing power in terms of spending and saving. Here, disposable net income is just €4,728, which is around 53%of the national average. More

Romania, Above Eight EU Member States in Terms of Actual Individual Consumption

Dan Pălăngean

In international comparisons of national accounts data, such as GDP per capita, it is desirable not only to express the figures in a common currency, but also to adjust for differences in price levels. Failing to do so would result in an overestimation of GDP levels for countries with high price levels, relative to countries with low price levels. More

Romania’s GDP, 1.6% of EU Total in 2020

Dan Pălăngean

Romania’s gross domestic product in 2020 was 218.2 billion euros, which puts us at 13th place among the economies of the EU, according to data published by Eurostat. In the previous year, we were just under Czechia (223,2 billion euros vs. 225,6 billion euros), which had a stronger decline and went down to 215,3 billion euros . More

Romania’s Loss of Competitiveness Compared to Hungary and Poland

Dan Pălăngean

Romania has improved its competitiveness compared to the Czech Republic and Bulgaria at the regional level in recent years but lost ground compared to Croatia, Poland and Hungary, according to data released by Eurostat. With an index calculated at 96.77 (2010 = 100), we were slightly better than our neighbor from the South of the Danube (97.32), with the note that a lower value shows an improvement in competitiveness. More

The 2020 GDP of Romania

Dan Pălăngean

The National Institute of Statistics confirmed the signal result of the economic growth for 2020 at the level of -3.9%, in the first preliminary version made public. The nominal value resulting from the overall calculation for the last year was RON 1,053,881.4 million, above the recent forecast and almost identical to that of 2019 (RON 1,053,884.8 million). However, it was lower in euro by about 4.22 billion, due to the increase in the average annual exchange rate (from 4.7452 RON/euro to 4.8371 RON/euro). The result – redistributed between quarters. Beware of base effect! More

Long-Term Interest Rate Fell Below 3%

Dan Pălăngean

Long-term interest rates for Romania fell by almost one percentage point in just two months, according to data released by Eurostat. After increasing up to 4.83% in April 2020, at the end of June it reached a level below the threshold of four percentage points (3.89%). Beyond the obvious effects on future budget payments, this indicator is critical for convergence purposes and the adoption of the euro. More

The Effect of Brexit on Romanian Foreign Trade

Dan Pălăngean

Over the last few years, the United Kingdom has been Romania’s most important foreign trade partner with whom we have managed to record a significant trade surplus. The island economy’s exit from the community bloc and the establishment of barriers in the trading of goods, even non-tariff barriers (the granting of zero customs duties was finally recorded during negotiations), will affect the trade balance of our country. More

Romania’s Recovery According to the World Bank

Dan Pălăngean

The data included in the autumn report of the World Bank, “COVID-19 and Human Capital”, which brings the forecast for Europe and Central Asia countries up to date shows the skepticism of this institution’s specialists regarding a rapid recovery of the Romanian economy, by reference to official estimates issued locally. Thus, the National Commission forecasted an economic decrease of -3.8% this year, followed by a recovery of 4.9%, which would bring GDP level in 2021 to + 0.9% above that registered in 2019. More

Remarks on the 2020 Romanian GDP Estimate – Reduced for the 3rd Time in the Official Forecast

Dan Pălăngean

The GDP 2020 estimate has been reduced for the third time in a row in the so-called Preliminary Autumn Forecast for the budget amendment published by the specialty National Commission. From an economic result of RON 1,141.4 billion according to the estimate issued in February, we went to RON 1,082.1 billion in April’s estimate, to RON 1,058.0 billion in August and now we reached RON 1,050.5 billion. More

Taxation of Wage Earnings for Pension Purposes in Romania, since 1950

Dan Pălăngean

The income tax has increased about four times in Romania since 1950, according to data published by the National Institute of Statistics (INS). The evolution of gross and net earnings shows that we have reached a doubling compared to the period before the political regime change, which occurred in 1989 (see data presented in extenso and centralized by decades in the table below). More

Romania’s Public Debt Relative to GDP – Implications

Dan Pălăngean

The public debt officially measured by the Romanian Ministry of Finance based on the European methodology advanced, in July 2020 alone, almost as much as in the whole second quarter, when Romania was caught in the middle of the pandemic-induced crisis shock and the quarterly GDP decreased by 12.3% compared to the previous quarter. The explanation for the relative increase as a public debt share of GDP (2.1 percentage points in Q2 and 2 pp in just one month, July 2020) is not limited to the increase by about 40% of the additional monthly borrowed amounts (RON 13.5 billion compared to the monthly average of 9.7 billion in full pandemic), but also in the reduction of the reporting base by over RON 20 billion (approx. EUR 4.1 billion) as a result of the methodology used. More

The COVID Crisis and the 2nd Pillar of the Romanian Pension System

Dan Pălăngean

Far from the public attention, the value of the assets held in the seven private funds that manage the pension money in Pillar II for seven and a half million future pensioners decreased dramatically in the second part of February and continued to decline during March, with the minimum being reached on the 18^th of March 2020. More