The 2024 European Commission Country Report on Romania provides a comprehensive analysis of the nation's economic performance, labor market dynamics, and fiscal health. In 2023, Romania's real GDP growth decelerated to 2.1%, down from 4.1% in 2022. This slowdown was primarily due to tight financial conditions, sluggish disinflation, and weak growth in private credit, which collectively constrained real disposable incomes and domestic demand. Additionally, subdued external demand adversely affected manufacturing output. Despite these challenges, the labor market remained robust, with real wages experiencing growth as inflation eased in the latter half of the year. A notable increase in EU-funded public infrastructure investments helped offset the downturn in private consumption and exports. Consequently, the current account deficit narrowed to approximately 7% of GDP in 2023, reflecting both the moderation in domestic demand and improved terms of trade. Nonetheless, this deficit remains substantial, driven largely by significant government deficits.​

Looking ahead, economic growth is projected to accelerate to around 3% in both 2024 and 2025, fueled by higher real disposable incomes that are expected to bolster private consumption. This anticipated increase in disposable income is largely attributed to public-sector spending and significant hikes in wages and pensions. Investment is forecasted to remain resilient, supported by a favorable fiscal stance and robust EU funding, including allocations from the Recovery and Resilience Facility and Cohesion Policy Funds. However, the current account deficit is expected to persist at elevated levels during this period.​

Inflation showed signs of moderation, with the Harmonized Index of Consumer Prices averaging 9.8% in 2023, down from 12% in 2022. This decline was influenced by tighter monetary policy, weaker economic activity, and falling energy prices. Despite this overall decrease, core inflation remained slightly above 10% at the end of 2023, driven in part by rapid wage increases, particularly in the private sector, and significant contributions from energy-intensive industrial goods. While price growth is expected to slow further to around 4% by 2025, there are upside risks to inflation if salaries and pensions continue to rise swiftly.​

The European Commission's in-depth review under the Macroeconomic Imbalance Procedure identified ongoing vulnerabilities in Romania related to its substantial current account and fiscal deficits. The external deficit has been on an upward trajectory over the past decade, exacerbated by large government deficits. Persistent high government deficits under current policies may increase external indebtedness, heightening reliance on external financing and exposing the country to shifts in investor sentiment and external shocks.​

On the labor market front, the employment rate for individuals aged 20-64 increased to 68.7% in 2023, yet it remains among the lowest in the EU. Notably, significant employment gaps persist, particularly among women and individuals with disabilities, both of which exceed the EU averages. Additionally, low-skilled workers face considerable challenges, with an employment rate of 44.9% in 2022, markedly below the EU average of 57.2% and substantially lower than the rate for individuals in Romania with higher skill levels.​

In summary, while Romania's economy has demonstrated resilience amid various challenges, it continues to grapple with structural issues, including significant fiscal and current account deficits, persistent inflationary pressures, and labor market disparities. Addressing these challenges is crucial for ensuring sustainable and inclusive economic growth in the coming years.