Dan Pălăngean

Senior Expert, National Bank of Romania

Romania, Second Among EU Members Regarding Risk of Poverty or Social Exclusion

No. 53, May-Jun. 2025 In 2024, 93.3 million people in the EU (21.0% of the population) were at risk of poverty or social exclusion, which means they lived in households experiencing at least 1 of 3 poverty and social exclusion risks: risk of poverty, severe material and social deprivation, and living in a household with very low work intensity. Compared with 2023, there was a slight decrease of 0.3 percentage points (21.3% of the population, 94.6 million people). More

Romania, Largest Increase in Labour Cost Last Year

Dan Pălăngean

No. 53, May-Jun. 2025 In 2024, compared with 2023, hourly labour costs at whole economy level expressed in euro rose by 5.0% in the EU and by 4.5% in the euro area. Within the euro area, hourly labour costs increased in all countries. The largest increases were recorded in Croatia (+14.2%), Latvia (+12.1%) and Lithuania (+10.8%) and the lowest in Czechia (+1.3%), followed by Finland (+1.8%) and Luxembourg (+2.1%). More

Living Standards by Cities in Romania – Cluj Has Overtaken Bucharest

Dan Pălăngean

No. 52, Mar.-Apr. 2025 Cluj is just ahead of Bucharest in terms of local purchasing power and the amount needed for monthly expenses, according to data aggregated by the international website numbeo.com. Thus, with +0.7% in the first indicator and a slightly lower need for money for the same standard of living (despite higher rents), the capital of Transylvania marginally outperformed the capital of Romania. More

București-Ilfov, Leading Region in EU at Work Intensity

Dan Pălăngean

No. 51, Jan.-Feb. 2025 The work intensity of a household is the ratio of the total number of months that adult household members have worked during the income reference year and the total number of months the same household members theoretically could have worked in the same period. It is defined in levels, ranging from very low (household working time was equal to or less than 20% of the full potential) to very high (working time was more than 85% of the full potential). Generally, the higher the work intensity within a household (the closer people are to full employment), the lower the probability of being at-risk-of-poverty. More

Immediate and Ultimate Foreign Direct Investment

Dan Pălăngean

No. 51, Jan.-Feb. 2025 In 2023, for the 11 EU Member States that reported inward Ultimate Investing Economy (UIE) in Foreign Direct Investment positions, the top UIE was Germany, (12.1% of total value of UIE FDI positions of the 11 reporting countries), followed by the United States (11.9%). Romania is included in the reporting EU Member States, alongside Austria, Czechia, Denmark, Estonia, Spain, Finland, France, Greece, Italy and Portugal, which reported inward UIE FDI positions to Eurostat. More

REER – Romania in a Decent European Position

Dan Pălăngean

No. 50, Nov.-Dec. 2024 Romania occupies a depreciating but relatively decent position in the regional context in terms of the Real Effective Exchange Rate (REER), an indicator that summarizes the evolution of the exchange rate and consumer prices in relation to the main actors in international trade. The indicator is critical for the chronic and growing trade deficit, reaching at over 18 billion euros in the first 7 months of this year. More

The Excessive Deficit of Romania – Context and Possible Sanctions

Dan Pălăngean

No. 49, Sep.-Oct. 2024 The excessive deficit procedure is a major factor in fighting the fiscal deficit for Romania, which is expected to rise to approx. 7% of GDP this year. Due to COVID-19, the EU suspended its budgetary rules for all Member States between 2020 and 2023 by activating the general escape clause. As of 2024, the general escape clause is no longer in effect. The EU has therefore relaunched the deficit-based EDP process under the new rules of the revised economic governance framework. More

Social Scoreboard – Romania vs. Poland in the EU

Dan Pălăngean

No. 48, Jul.-Aug. 2024 Eurostat has published the state of play of the Social Scoreboard for Member States, summarised in the evolution of 16 profile indicators. In terms of GDP per capita at standard purchasing power parity, Romania is at 80% of the EU average, on a par with Poland and higher than Hungary, Croatia (76%), Slovakia (73%), Latvia (71%), Greece (67%) and Bulgaria (64%). More

Romania, the Lowest Number of Working Years among the EU Member States

Dan Pălăngean

No. 48, Jul.-Aug. 2024 Last year, Romania recorded the lowest number of years of work among EU member states, according to data published by Eurostat. With an average of only 32.2 years, we ranked below Italy (32.8 years), Croatia (34 years), Greece (34.2 years) and Bulgaria (34.5 years). Which, socio-culturally, shows that we are, simultaneously, both Latins and Balkans. More

The Budget Deficit in the Last 20 Years. Some Observations

Dan Pălăngean

No. 47, May-Jun. 2024 Romania has systematically recorded a negative budget execution result over the last 20 years. Essentially, the idea of the normalcy of the budget deficit has taken root, with the only discussion being about its size. In fact, in the long term, we should aim for a balance between revenues and expenditures. Otherwise, everything we accumulate at specific points, for various reasons (be it justified or not), will translate into systematic interest payments. These payments represented no less than 2.1% of GDP in 2022 (note, 70% of the space allowed by the Maastricht rule of 3%), and in 2023 they represented 1.9% of GDP, one-third of the deficit recorded in public finances. More

High Poverty - Low Education, the Vicious Circle

Dan Pălăngean

No. 46, Mar.-Apr. 2024 A recent report of the European Commission regarding country analysis on Social Convergence Framework (SCF) points out the problems of Romania, where high poverty - low education constitutes a vicious circle. Therefore, the quality, relevance and inclusiveness of education and training should be strongly tackled by public policies to support labour market and improve poverty rates. More

Employees Working Abroad, of Great Importance for Romania

Dan Pălăngean

No. 45, Jan.-Feb. 2024 For France, Romania and Belgium, the positive net balance of personal transfers and compensation of employees reduces their current account deficits significantly, according to data for 2022 published recently by Eurostat. For some countries, net inflows of personal transfers and compensation of employees are important sources of external funding and contributors to a recipient’s disposable income and GNI.Romania considerably reduced its negative current account balances through these net inflows, with €7.4 billion (see Figure 1). The current account deficit for Romania would have been €33.5 billion instead of €26.1 billion, which includes transactions related to personal transfers and compensation of employees. More