The ILO and Romania

  • © Daniel Mihailescu/AFP/Europress

    About the ILO in Romania

    Growth is becoming more volatile and key social policy challenges remain

    The democratic transition in Romania comprised difficult economic and social reforms including the restructuring of entire industries. Since the 1990s, Romania has seen periods of very fast growth being considered as one of Europe’s few tiger economies. However, this growth track has been volatile with several setbacks due to inconsistent reforms and recessions of the global economy. Overall, GDP per capita rose from 30% of EU average in 1995 to 72% in 2020, with particularly fast growth since 2015, not least due to a burgeoning IT sector and growth in electronics and automotive manufacturing. Recently, the country moved from middle to high-income status.

    The Romanian labour market benefited from the strong economic growth of the past years before the outbreak of the Covid-19 pandemic. The employment rate is approaching the EU average (71% vs 72% in 2020) and the unemployment rate of 5% is not substantially higher than its pre-pandemic level of 4% - the lowest in 20 years. However, youth unemployment topped 20% in 2021 and inactivity remains one of the highest in the EU especially for women (female inactivity rate of 41% vs. EU average of 32%, 2020). The gender employment gap stands at over 19%, one of the highest in the EU. The persistent negative population growth and the outward migration of labour have generated significant labour shortages.  Continue reading