Romania’s income convergence with OECD countries has continued, driven largely by gains in labour productivity. However, labour force participation remains low by OECD standards. A shrinking working-age population is expected to increasingly weigh on long-term growth. Capital deepening has significantly contributed to productivity growth, supported in part by EU funds.
Enhancing labour force participation among women, youth, and older individuals in the formal labour market would strengthen overall labour utilisation. Further improvements in educational attainment and performance, along with efforts to reduce the urban-rural divide, would support productivity growth. Other key priorities include sustaining efforts to combat corruption and improving the overall business environment, notably by addressing tax distortions and boosting the development of digital skills.
