Katja Schmidt
Cameron Hall
OECD Economic Surveys: Romania 2026
Abstract
Romania has achieved significant income convergence with the OECD over the past two decades, driven by increased openness, deeper integration into global value chains, capital inflows, and economic liberalisation. However, there is considerable potential to further integrate domestic businesses into global markets and strengthen linkages with foreign enterprises operating in Romania, which would enhance value capture from global integration. Enhancing the absorptive capacity of the domestic economy will require investments in human capital and skills, support for research and innovation, accelerated technology adoption, and improved infrastructure. Additionally, further enhancing the business environment by reducing administrative and regulatory burdens and strengthening insolvency procedures and competition will foster domestic entrepreneurship and firm growth. While Romania has made significant progress in strengthening its institutional and policy framework, further efforts to improve tax compliance, ensure legislative stability, and enforce anti-corruption measures will help create the conditions for a strong and competitive economy.
This chapter reviews Romania’s recent performance in trade and foreign direct investment (FDI) and explores the challenges to sustaining long-term competitiveness. It focuses on strategies to boost productivity and move beyond cost-based production advantages, by moving up the value chain and enhancing spillovers from foreign firms in Romania. Achieving this requires boosting the absorptive capacity and productivity of the domestic economy, particularly by strengthening human capital, innovation, competition, and infrastructure. This would also help ensure that the benefits of trade and FDI are more widely shared across workers, firms, and regions. The chapter also highlights strategic sectors, such as the Information and Communications Technology (ICT), with the potential to support this objective. Finally, it explores the institutional and governance framework needed to ensure supportive conditions for a competitive economy.
4.1.1. Productivity growth has slowed after strong catch-up
Over the past two decades, Romania has recorded one of the fastest GDP growth rates in comparison with OECD members, driven by integration into global markets, EU accession, and capital inflows. This has led to significant income convergence, from an OECD average of about 43% in 2004 to 71% in 2024 in GDP per capita (PPP). Labour productivity grew by an average of 3.6% per year over the last two decades, leading to a significant catch-up in productivity levels (Figure 4.1, Panel A&B). Both capital accumulation and total factor productivity (TFP) have been driving labour productivity increases. Higher productivity enables firms to produce more with the same or fewer resources, reducing unit costs and enhancing competitiveness in global markets.
However, as Romania approaches OECD income and productivity levels, catch-up growth drivers are becoming smaller. Productivity growth momentum has weakened in recent years compared to the pre-pandemic trend and labour productivity declined by 1.2% in 2024. Romania faces the challenge of shifting from a cost-driven growth model toward one anchored in higher value-added, by sustaining productivity gains closer to the technological frontier. This will require strengthening innovation, education, technology absorption and business dynamism, supporting investment and TFP growth.
Also, productivity differences between foreign affiliates operating in Romania and domestic firms remain substantial (EUR 45 000 versus EUR 24 000 in gross value added per person employed) (Eurostat, 2025[1]), limiting spillovers from foreign affiliates to the domestic economy. Bridging this productivity gap requires strengthening the capabilities of domestic firms, particularly through more effective technology and knowledge transfers. Enhancing these channels can help firms move up the value chain and integrate more deeply into global markets, including through stronger linkages with foreign affiliates operating in Romania.
Moreover, it will be important to ensure that these productivity gaps are appropriately analysed to inform future pro-productivity policies. Romania established in 2018 a Productivity Board which was never operational. The government is currently considering the establishment of a new Productivity Board in line with the practice of many OECD countries. The Board should have access to data and provide practical recommendations to the government on future pro-productivity policies (Cavassini et al., 2022[2]).
From a firm-level perspective, productivity growth in Romania has largely stemmed from the reallocation of market shares toward more productive firms, rather than from improvements within firms themselves, at least prior to the COVID-19 crisis (Iootty, Pena and De Rosa, 2019[3]). Within-firm productivity gains have remained subdued, reflecting limited capacity to enhance efficiency through internal processes. Strengthening firms’ internal capabilities for growth and expansion requires improving their operational processes and efficiency.
Note: OECD CEEC is a non-weighted average and covers Czechia, Hungary, Poland, Slovak Republic, and Slovenia.
Source: OECD Productivity database.
While productivity is a key driver of both price and non-price competitiveness, wage and cost developments also shape price competitiveness. Over the past decade, strong productivity growth has been accompanied by steady wage increases, although wages have increasingly outpaced productivity growth. Minimum wages in Romania rose by an average of 13% annually over the past decade – faster than in other Central and Eastern European countries (CEEC) – and are now close to the regional average. Over the same period, compensation per employee also grew rapidly by 11% in nominal and 7% in real terms annually, outpacing labour productivity growth by nearly double (Figure 4.2, Panel A&B). This trend has resulted in a gradual erosion of Romania’s cost competitiveness. To remain competitive amid rising wages, Romania must strengthen non-cost competitiveness drivers such as product sophistication, quality standards and innovation.
In line with rising wages, domestic prices have increased significantly, with inflation remaining persistently above target in recent years and higher than in peer economies (see Chapter 1). Elevated inflation can undermine investment and hinder productivity growth by raising firms’ operating costs and increasing uncertainty around long-term planning. This also continues to weigh on Romania’s price competitiveness, as shown by the real-effective exchange rate (Figure 4.2, Panel C). Addressing macroeconomic imbalances is therefore not only essential for economic stability, but also critical from a competitiveness perspective.
Note: The real effective exchange rate is calculated by adjusting the nominal effective exchange rate (NEER), based on constant trade weights, for relative price levels using the GDP deflators of the home country and its trading partners. A GDP deflator-based REER captures broader price trends related to domestically produced goods and services, and is less affected by import prices or consumer-specific factors.
Source: Eurostat; and OECD Economic Outlook database.
4.1.2. Integration into global markets has deepened but domestic firms are underrepresented
Greater openness to trade and deeper integration into Global Value Chains (GVCs) have been important drivers of Romania’s labour productivity growth and technological upgrading. Romania’s trade openness has increased from around 60% of GDP in the early 2000s to nearly 80% of GDP in 2024 (Figure 4.3, Panel A). While Romania remains somewhat less open than other EU countries, particularly its CEEC peers, it has gained significant market share in global and EU markets (Figure 4.3, Panel B). Romania’s export performance was strong in the decade leading up to the COVID-19 crisis, though this trend has slowed and both, trade openness and export performance, have stagnated in recent years (Figure 4.4, Panel A).
Romania’s export structure remains strongly manufacturing-based, with manufacturing goods accounting for three-quarters of goods exports in 2024. A significant share of these manufacturing exports is concentrated in a few sectors, notably automotive – which increased its share to 17% of goods exports in 2024 from 3% in 2004 – and electrical components and equipment (Figure 4.5, Panel B), heightening Romania’s exposure to these sectors. High-technology goods – defined as goods with high R&D intensity, such as those in aerospace, computing, pharmaceuticals, and electrical machinery – make up an increasing share of Romania’s goods exports (Figure 4.4, Panel B). However, this share remains below OECD and EU averages, and lags behind regional peers like Czechia and Hungary, indicating untapped growth potential in these sectors.
1. Sum of exports and imports of goods and services as percentage of GDP.
2. OECD Central and Eastern European countries (CEEC) non-weighted average include Czechia, Hungary, Poland, Slovak Republic, and Slovenia.
Source: OECD Analytical database; and World Bank, World Development Indicators database.
Note: In Panel A, export performance is calculated by comparing the growth of export volumes with that of export market. This shows whether the country's exports grow faster or slower than its market, i.e. if over time it is experiencing market share gains or losses. Euro area 17 covers countries that are members of both OECD and Euro area. OECD CEEC is the non-weighted average of Czechia, Hungary, Poland, Slovak Republic, and Slovenia.
Source: OECD Analytical database; and World Bank, World Development Indicators database.
Services exports have become an increasingly significant component of Romania’s trade, accounting for around 32% of total exports, above both the OECD average and that of its CEEC peers. They are also a major intermediate input in goods exports. A significant proportion of these exports is composed of ICT services and other business services (Figure 4.5, Panel D). Romania’s ICT sector plays a pivotal role in this dynamic (see Box 4.1) (ANIS, 2024[4]). Romania’s strong service orientation presents an opportunity to deepen trade competitiveness by leveraging high-value service inputs.
Note: Panel A and B: Data coming are collected on the basis of the Harmonised System 2017; Panel C and D: Data coming are collected according to the Balance of Payments methodology.
Source: United Nations Comtrade database; and OECD International Trade in Services database.
Foreign-controlled firms play a dominant role in Romania’s export activity, contributing 70% to goods exports and 80% to manufacturing goods exports in 2024 (Figure 4.6, Panel B) and the share of domestic firm participation in export activity is low, also compared to most of the other CEEC. Most goods exports are concentrated in large enterprises, mostly multinationals (MNEs) (Figure 4.6, Panel A). Romania has a large share of micro and small domestic enterprises – 99% of firms qualify as micro or small businesses – many of which may lack the capacity, resources, or knowledge to engage directly in export activities. A somewhat smaller share of services exports, about 56%, is generated by foreign enterprises, compared to goods exports.
Romania is highly integrated into trade with the European Union, with approximately 72% of its goods exports and 70% of its services exports directed to EU markets (Figure 4.5, Panel A&C). This strong orientation toward the EU reflects Romania’s deep integration into European production networks and the significant role played by foreign – primarily European – enterprises in export activities. While this integration has been a key driver of export growth, it may limit the scope for rapid diversification into non-EU markets. Expanding into new markets would require efforts to strengthen domestic export capacity and advance along the value chain.
Goods exports by size and type of ownership of the trading enterprises, 2024 or latest available
Source: Eurostat.
Romania hosts a dynamic and expanding ICT sector, contributing 7.6% to gross value added in 2024, well above the EU (5.5%) and the averages for OECD CEEC peers (5.8%). The sector’s direct, indirect, and induced impact accounted for up to 14% of Romania’s GDP in 2021, underscoring its economic importance (ANIS, 2024[4]). The ICT sector is a net exporter. Its employment share remains relatively low (2.8% versus 5.0% in the EU), and emigration of skilled ICT professionals is a challenge. Romania has a high share of ICT graduates (6.8% versus 4.5% in the EU of total graduates).
In terms of structure, the sector is dominated by custom software development (ANIS, 2024[4]). Between 2018 and 2023, turnover in this segment nearly tripled. The ICT sector is characterised by a high prevalence of microenterprises (95%), i.e. with less than 10 employees, many of which have limited or no operational activity, highlighting structural inefficiencies and limits to scale. Despite high innovation potential of the sector, R&D investment and IP generation also remain very limited (ANIS, 2024[4]).
The sector previously benefited from tax advantages for IT professionals, but these were repealed in 2025 as part of fiscal consolidation (see Chapter 1). These exemptions were broadly effective in supporting the development of the ICT sector (Manelici and Pantea, 2021[5]). IT professionals are now subject to the standard 10% income tax, along with full social contributions.
4.1.3. Romania has a mid-level position in global value chains
Romania has a mid-level position in global value chains (GVC), with forward linkages predominating. By 2022, 52% of Romania’s gross exports were GVC-related, i.e. either containing foreign value added or domestic value added for other country’s exports, which is close to the OECD average of 51%. Romania’s backward participation, measured as the share of foreign value-added in gross exports stood at 28%, which is slightly below the OECD average and significantly lower than that of peer CEECs that are more heavily specialised in manufacturing and midstream assembly functions (Figure 4.7, Panel A). Backward linkages can increase a country’s gross exports and support productivity and technology transfer, as they often involve replacing less efficient domestic inputs with more competitive imported ones (Crowe and Rawdanowicz, 2023[8]; Javorcik, 2004[9]). However, they can also limit the share of value produced domestically, especially when local firms are not engaged in higher-value activities within the production chain.
Romania’s forward participation in GVC, i.e. the share of domestic value added embedded in foreign gross exports, stands at approximately 24%, above the OECD average and that of peer CEECs (Figure 4.7, Panel B). This shows that export demand is indirectly linked to global trade flows, reflecting the country’s role in supplying intermediate goods and services. Compared to other CEECs, Romania is more oriented toward upstream production activities, such as the manufacturing of vehicle components, electrical and electronic equipment, and the provision of IT and software services. These sectors are typically associated with higher domestic value-added shares (the so called “smile-curve”, where domestic value added is highest at both ends of the GVC) and stronger forward linkages within global production networks.
Note: Backward participation is the foreign value added embodied in a country's exports as a share of this country’s total exports. Forward participation is the domestic value added of a country embodied in the exports of foreign countries as a share of this country’s total exports. OECD and OECD CEEC are non-weighted averages. OECD CEEC covers Czechia, Hungary, Poland, Slovak Republic, and Slovenia.
Source: OECD Trade in Value Added (TiVA) database, 2025 edition.
While Romania’s deeper integration into GVC has brought significant benefits – such as productivity gains and technology transfers– it has also heightened the country’s exposure to global business cycles (Chiacchio and Semjonovs, 2020[10]). This vulnerability is further amplified by a growing sectoral specialisation, particularly in the automotive industry. Mitigating the risks associated with GVC dependence, while preserving the benefits of integration, requires a broad-based policy (Crowe and Rawdanowicz, 2023[8]). This includes diversifying the sectoral base to reduce over-specialisation, strengthening human capital and domestic research and innovation to support upgrading and value capture within GVCs, upgrading domestic SME capabilities and enhancing overall economic resilience to improve the ability to absorb external shocks.
4.1.4. Foreign investment has been an important driver of catch-up growth
Although Romania began attracting important foreign direct investment (FDI) later than other CEECs, it has made significant advances over the past two decades. Between 2014 and 2024, FDI inflows averaged 2.5% of GDP, comparable to regional peers, except for Hungary (Figure 4.8, Panel A). By 2024, the total FDI stock reached approximately 35% of GDP, still well below the OECD-CEEC average of 60% of GDP. The stock of FDI as a percentage of GDP has declined over the past decade across most CEEC, reflecting a combination of international and domestic factors. These include a shift toward more domestic demand-driven growth – less reliant on FDI-intensive export sectors –, a transition to less capital-intensive service-oriented investments, and a broader global downturn in FDI flows. Around 87% of Romania’s FDI stock originates from EU members.
Romania offers a very favourable FDI regulatory environment, with minimal statutory barriers, as reflected in its low score on the OECD FDI Regulatory Restrictiveness Index (Figure 4.8, Panel B). Some existing restrictions relate to the acquisition of agricultural land, which were tightened in 2020. Nevertheless, Romania still attracts significant foreign investment in agriculture and foreign ownership is estimated at 30% to 40% of farmland (European Parliament, 2015[11]). Sectoral restrictions include limits on foreign equity in air transport. Romania also strengthened its FDI screening in 2022-2023, aligning with the EU’s 2019 directive and creating the Commission for the Examination of Foreign Direct Investments (CEISD).
Note: In Panel A, OECD CEEC covers Czechia, Poland, Slovak Republic and Slovenia (Hungary having very strong fluctuations of FDI flows). In Panel B, OECD, EU and OECD CEEC are unweighted averages. OECD CEEC covers Czechia, Hungary, Poland, Slovak Republic, and Slovenia
Source: OECD FDI Main Aggregates BMD4 database, Eurostat (for Romania); and OECD FDI Regulatory Restrictiveness Index database.
Foreign investors play a vital role in Romania’s economy, either directly by creating value added and employment and indirectly through spillovers to the domestic economy, primarily in the form of productivity gains among domestic firms. In 2023, the direct contribution of foreign affiliates accounted for approximately 42% of value added and 27% of employment (Eurostat, 2025[1]). Regarding spillovers, they are closely tied to the strength of linkages between foreign and domestic firms (Javorcik, 2004[9]; Havranek and Irsova, 2011[12]). Among these, backward linkages, where foreign affiliates source inputs from local suppliers, are widely recognised as the most effective channels for productivity improvements (see Box 4.2). Several studies show the presence of positive backward spillovers in Romania, while horizontal spillovers remain limited or occasionally negative (Jude, 2015[13]; Lenaerts and Merlevede, 2015[14]; National Bank of Romania, 2018[15]).
In Romania, linkages between foreign enterprises and domestic suppliers are well established, with foreign firms sourcing a significant share of their inputs locally. Based on data from the OECD AMNE database, approximately 40% of the output of foreign affiliates in Romania was sourced domestically, compared to around 20% from imported intermediates (Cadestin et al., 2019[16]). This level of local sourcing is comparable to Poland and exceeds that of other OECD CEECs such as Hungary and Slovakia. However, a notable portion of these domestically sourced inputs originates from other foreign affiliates (Figure 4.9).
These patterns are confirmed by more recent firm-level survey data. According to the 2018-2020 edition of the EBRD-EIB-WB Enterprise Survey, foreign-owned enterprises in Romania (defined as firms with over 10% foreign ownership) source approximately 54% of their intermediate inputs domestically and 43% from foreign suppliers. In comparison, domestically owned firms source about 69% of their inputs locally.
The extent of domestic sourcing is closely linked to country size, with larger economies typically offering a broader, more diverse base of domestic suppliers (Cadestin et al., 2019[16]). Romania also exhibits a higher share of domestic value added than many other CEECs (see main text). Nevertheless, as a larger economy, Romania still has untapped potential to further increase domestic value added and strengthen linkages of foreign affiliates with local suppliers, particularly when compared to more advanced OECD countries.
Sourcing structure of foreign affiliates, individual countries, total economy, 2020
Source: Calculations based on the OECD Analytical AMNE database, see (Cadestin et al., 2019[16]).
The extent to which domestic firms benefit from these effects depends heavily on their absorptive capacity, including factors such as human capital, R&D investment, and the technological gap (Jude, 2015[13]). To fully harness the benefits of FDI, it is therefore essential to enhance the absorptive capacity of the domestic economy, as stronger linkages emerge when foreign investors find competitive local partners.
The following sections will explore policies that could help strengthen these linkages, with the aim of enhancing domestic value capture from FDI and global integration, while also contributing to broader improvements in productivity, in particular:
Enhancing innovation capacities of domestic firms
Promoting human capital and skills
Improving the business environment and market efficiency
Fostering infrastructure development
Continuing the fight against corruption.
The relatively low productivity of domestic enterprises constrains their capacity to engage effectively with foreign affiliates and benefit from knowledge and technology spillovers. The innovation gap between domestic and foreign firms remains significant compared to regional peers, with domestic firms showing low rates of product, service, and process innovation, and limited investment in R&D (Figure 4.10). Addressing this requires measures to build absorptive capacity at the firm level. In parallel, improving access to finance, particularly for capital investment and intangible assets, is essential to enable firms to undertake productivity-enhancing investment and innovation, and scale their operations. These efforts would contribute to a more dynamic business ecosystem and higher domestic value added in export activity.
Share of firms introducing innovation or spending on R&D over recent past period
Note: Data refers to 2023 for Bulgaria, Hungary, Romania and Slovak Republic; 2024 for Czechia and Slovenia; and 2025 for Poland.
Source: World Bank Enterprise Surveys, www.enterprisesurveys.org.
4.2.1. Strengthening R&D investment to foster innovation
The Romanian economy shows a low innovation capacity (Figure 4.10), also relative to patents, scientific publications and revenues from intellectual property. Total spending on R&D (GERD) is modest at just 0.5% of GDP, among the lowest compared to OECD members (Figure 4.11), and R&D intensity has stagnated over the past decade. The structure of R&D spending also differs notably from OECD and EU countries: contributions from the business sector and higher education institutions remain notably modest, while government accounts for a disproportionately larger share of total R&D spending.
The limited involvement of the business sector in R&D reflects a weak orientation toward innovation and a stronger focus on technological adoption, also rooted in a legacy where research was primarily conducted by public institutions. However, it is widely recognised that increased investment in R&D is typically associated with a higher rate of technology adoption and diffusion, as the two act as complements rather than as substitutes (Jiménez and Ziesemer, 2024[17]). Hence, fostering innovation and R&D can also serve as a catalyst for faster technology adoption. While MNEs operating in Romania often have greater financial and organisational capacity to invest in R&D, many conduct these activities elsewhere. Although attracting R&D hubs from MNEs remains a strategic objective, strengthening the domestic sector’s capacity for research and innovation is critical for long-term competitiveness.
Gross domestic expenditure on R&D, 2024 or latest available
Note: OECD and OECD CEEC are non-weighted averages. OECD CEEC covers Czechia, Hungary, Poland, Slovak Republic, and Slovenia.
Source: OECD Main Science and Technology Indicators database.
Romania offers relatively generous R&D tax incentives to encourage business R&D. Companies can benefit from a deduction of 50% of eligible R&D expenses from their corporate income tax (CIT) base. In addition, accelerated depreciation is permitted for equipment used in R&D activities. Furthermore, companies that exclusively carry out innovation and R&D activities are exempt from CIT for the first 10 years of operation. However, the amount of tax support effectively provided by the government through R&D tax incentives for business R&D is low, at 0.01% of GDP (vs. around 0.1% of GDP for the OECD and the EU average) (OECD, 2025[18]), reflecting low overall business R&D activity and low uptake. Administrative hurdles and limited awareness of available tax incentives often prevent firms from making use of R&D tax credits. Some, especially SMEs, are also unaware that their activities could qualify as R&D. Access to information should be improved.
SMEs account for only about 12% of business R&D, underscoring the dominant role of large enterprises in driving R&D activities. If the uptake of R&D tax incentives by smaller domestic firms proves limited, introducing refundability – whereby the credit exceeding the tax liability is reimbursed in cash – could provide support to innovative SMEs, particularly in their early stages. Refundable tax credits are generally considered more effective in stimulating R&D investment for startups, SMEs, and firms engaged in early-stage product development (OECD, 2023[19]). Several OECD countries, including Canada, France (through the ‘CIR Jeune Entreprise Innovante’), and the United Kingdom, offer refundable R&D tax credit programmes specifically targeted at SMEs. Further targeted actions – such as proposing clearly defined public-private project opportunities – could also help boost SME engagement in R&D.
In addition to tax incentives, several grant schemes support domestic SMEs, though many are not specifically designed to foster innovation. One such initiative is the ‘Start-up Nation' programme, financed through EU structural funds, which provides grants covering up to 90% of eligible expenses (up to RON 250 000) for new businesses. Eligibility, however, is not linked to innovation, thereby incentivising self-employment rather than the development or commercialisation of innovative products or services. Programmes like ‘Start-up Nation’ should be more effectively aligned with innovation objectives by introducing clearer eligibility criteria focused on technological novelty or R&D intensity. The National RDI Plan 2022-2027 also envisaged the introduction of bridge grants – to foster collaboration between universities and businesses – and innovation vouchers for businesses. These instruments have yet to be implemented.
Regarding the public research and innovation landscape, an in-depth review conducted in 2022 identified several important structural challenges (European Commission, 2022[20]). One is the fragmentation of the public research system, where a small number of high-performing units coexist with many underperforming and outdated institutions. The system also suffers from weak governance, limited accountability, and insufficient financial stability (European Commission, 2022[20]). Since 2022, there has been limited progress in addressing these issues. Romanian authorities should continue efforts to reform the public research landscape. One potential step toward greater consolidation and improved coordination would be the creation of a central coordinating body for public research, with a clear mandate and performance-based oversight, like institutions such as the Netherlands Organisation for Scientific Research (NWO), the United Kingdom's Research and Innovation Agency (UKRI) or the Research Council of Finland. In parallel, increasing public investment in research remains a medium-term objective.
4.2.2. Enabling the adoption of new technologies
The capacity of domestic enterprises to adopt and effectively use digital technologies plays a critical role in their ability to engage with foreign enterprises operating in Romania and to access global markets. For instance, firms that actively use online sales or electronic sharing of information can significantly expand their reach. According to the Digital Intensity Index (DII), over three-quarters of Romanian firms show low or very low levels of digital intensity (Figure 4.12). Digital transformation is particularly slow among microenterprises (fewer than 10 employees), which represent over 90% of active firms. Romanian enterprises also lag in providing ICT training, with only 12% offering such training in 2024. The digital divide may act as a barrier to deeper integration with international firms and global markets.
Percentage of enterprises with low or very low digital intensity index
Note: Enterprises cover all activities (except agriculture, forestry and fishing, mining and quarrying, and financial sector) and refer to enterprises with 10 persons employed or more. OECD CEEC is the non-weighted average of Czechia, Hungary, Poland, Slovak Republic, and Slovenia.
Source: Eurostat.
Closing the digital adoption gap requires a set of complementary policies, such as investment in digital infrastructure and the development of digital skills (Nicoletti, von Rueden and Andrews, 2020[21]). Trade openness is often considered itself a key enabler of technology adoption and diffusion (Perla, Tonetti and Waugh, 2021[22]). In what regards connectivity, access to digital infrastructure in Romania has significantly improved over recent years and is strong. Romania outperforms many OECD and EU countries in fixed digital connectivity, including in rural areas. In 2024, coverage of both high-speed broadband (≥100 Mbps) and very high-capacity networks reached 96%, well above the EU averages of 91% and 83%, respectively (see also European Commission (2025[7])). Average fixed download speeds also exceed OECD averages (OECD, 2025[23]). Businesses with access to rapid broadband is among the highest in the OECD (Figure 4.13). However, Romania still lags behind in mobile 5G coverage, reaching just 47% nationally and 15% in rural areas, compared to 94% across the EU. Mobil connectivity should be further enhanced through the expansion of 5G networks.
Romania is taking further steps to streamline access to digital infrastructure. In 2025, the government lowered indicative tariffs (nonbinding reference prices) for using public road infrastructure to install telecom networks (European Commission, 2025[7]). These tariffs, issued by the national communication regulator ANCOM, are over 90% lower than those previously set by the Ministry of Transport, making deployment significantly more affordable. While it is too early to measure the full impact, this move is expected to encourage investment, accelerate network rollout, and reduce regional disparities in connectivity. To support targeted interventions, ANCOM has also published a study and map showing where high-speed networks are available and where gaps remain, helping guide future infrastructure planning (ANCOM, 2024[24]).
Share of enterprises with a broadband download speed of at least 100 Mbps, 2025
Note: OECD CEEC is a non-weighted average and covers Czechia, Hungary, Poland, Slovak Republic, and Slovenia.
Source: OECD ICT Access and Usage by Businesses database.
In contrast to strong connectivity, digital skills – both within the business environment and the broader population – remain low. In 2025, only 32% of the population had at least basic overall digital skills, the lowest level in the EU (60%), and around 9% of the population had no digital skills at all (Eurostat, 2026[25]). While Romania has taken steps to enhance digital skills through national strategies and EU-funded programmes, progress is slow. Given the significant digital skills gap, more efforts are needed. Romania could draw for example inspiration from Portugal’s National Digital Competences Initiative e.2030, which takes a broad approach to digital upskilling, including free digital literacy courses and a free certification pathway for informal learners (Government of Portugal, 2021[26]).
The intensity of digital service usage has a potential strong positive impact on firms’ productivity performance. OECD estimates show that a 10-percentage point increase in the share of firms using high-speed broadband internet is associated with a 1.4% increase in TFP for the average firm after one year and a 3.9% increase after three years (Gal et al., 2019[27]). Targeted government support can facilitate greater uptake of digital services by businesses. Romania already has several public support programmes in place, primarily funded through the Recovery and Resilience Facility (RRF), including schemes that provide debt financing to SMEs for digital investments. The country has also established Digital Innovation Hubs (DIHs), under the European Union’s digital strategy, to help SMEs adopt advanced digital technologies. However, information and management of support programmes is fragmented across multiple authorities – such as the Ministry of Development (for the ‘Regional Operational Programme’) and the Ministry of Investments and European Projects (for RRF-funded initiatives) – which complicates access for firms.
Rather than introducing new programmes, it may therefore be more effective to enhance awareness and accessibility of existing ones. In this regard, the government should consider developing a centralised online platform that serves as a single point of access for all digitalisation-related information relevant to the domestic business sector (European Investment Bank, 2023[28]). Ireland offers a useful example through its ‘Grow Digital portal’. The platform provides practical advice, details on available supports, training and funding opportunities, and includes a self-assessment tool to help companies identify their digital needs.
Modern management practices also play a crucial role in driving technology development and diffusion (Nicoletti, von Rueden and Andrews, 2020[21]). Beyond technical capabilities, firms require strategic leadership, efficient organisational processes, and innovation-oriented governance to effectively integrate new technologies. Strengthening management competencies – especially within domestic SMEs – should be another policy focus. Public-private partnerships could support initiatives such as mentorship schemes or capacity-building programmes focused on digital transformation and organisational efficiency.
4.2.3. Expanding access to finance
Access to finance is essential for fostering productivity-enhancing investment and innovation. However, financial intermediation in Romania remains shallow compared to peer countries and OECD standards (OECD, 2024[29]; European Commission, 2025[30]), particularly for SMEs and early-stage firms. The financial system is dominated by bank-based intermediation, yet the loan-to-GDP ratio for non-financial cooperations (NFC) has stagnated at around 19-20% of GDP in recent years – the lowest in the EU and below the levels observed in peer economies such as Hungary (44%) and Bulgaria (40%).
Note: In panel A, the sum of non-financial corporation liabilities reflects the total for the non-financial corporation liabilities considered in the chart.
Source: Eurostat and European Commission (2025[30]); EIB Investment Survey 2025.
Romanian firms rely disproportionately on internal resources for financing. Internal funds constitute the primary source of financing for 79% of NFCs, while just around 7% of firms rely on bank loans (National Bank of Romania, 2025[31]). The remainder is typically composed of intra-group loans or supplier credit, with minimal access to equity or non-bank financial instruments. Commercial credit is particularly prevalent: Romania exhibits one of the highest shares of trade credit financing (15% of firms or 17% of funding), reflecting firms’ limited access to formal credit markets (National Bank of Romania, 2025[32]). Consequently, the proportion of firms declaring having financial constraints is above the EU average, particularly among SMEs (Figure 4.14, Panel B).
Several structural factors explain this low financial intermediation. On the supply side, banks maintain conservative lending practices, often requiring high levels of collateral and offering limited risk-based pricing (OECD, 2024[29]). The SME segment is generally viewed as high-risk due to limited formalisation. On the demand side, many firms – particularly smaller and rural enterprises – lack the financial literacy, managerial capacity, or formal documentation needed to access credit. Low capitalisation of firms – nearly a third of firms had equity below the regulatory threshold in 2024 (see further below) – also limits access to external financing (National Bank of Romania, 2025[32]). Consequently, financially constrained firms forgo productive investment.
The use of EU funds or subsidised loans for financing also remains relatively modest, particularly among SMEs. Only about 2% of SMEs rely on EU funding or subsidised loans, where the share among larger firms reaches 7% (National Bank of Romania, 2025[31]). Given that many of these programmes are specifically designed to support SMEs, this comparatively low uptake suggests that information about available funding is not always accessible or effectively communicated to smaller enterprises. The National Committee for Macroprudential Oversight (NCMO) has stressed that improving EU funds absorption capacity, together with a stronger role of the financial system in co-financing EU-funded projects, could substantially increase financial intermediation (NCMO, 2022[33]).
Venture capital and private equity markets also remain underdeveloped, limiting financing for start-ups and high-growth firms. Although Romania has seen an increase in early-stage financing initiatives – largely through EU-supported instruments such as ‘Horizon Europe’ and ‘Smart Growth, Digitalisation and Financial Instruments Operational Programme’ – volumes remain modest. Private equity equates to only 0.04% of GDP and venture capital to just 0.01% of GDP in 2023 (European Commission, 2025[30]). Romania only captures a negligible share of the region’s venture capital investment, much below regional leaders such as Poland, Hungary or Czechia (Invest Europe, 2025[34]). Domestic institutional investors play a minimal role in equity financing, and private investment funds are few and limited in scale.
Capital markets are similarly undersized (OECD, 2022[35]). In 2024, listed shares were equivalent to only 10% of GDP and corporate bonds 0.3% of GDP, compared to 43% and 11% in the EU (Figure 4.14, Panel A). SME access to equity markets remains limited despite the presence of the AeRO market (the AeRO market is a segment of the Bucharest Stock Exchange designed specifically for startups, early-stage enterprises, and SMEs). Low liquidity, a large number of inactive shares, weak institutional participation, and low general knowledge impede the development of market-based financing channels (OECD, 2022[35]). The AeRO market holds considerable potential for further deepening and growth.
The outcome is a financing structure heavily skewed toward self-financing and short-term, relationship-based credit. This constrains firms – especially those with high growth potential or innovation-driven models – from scaling operations. In response, a range of targeted initiatives has been introduced to help bridge these financing gaps. Established in March 2025, the Investment and Development Bank (BID) is Romania’s first state-owned development bank, aimed at improving access to finance for SMEs, startups, and innovative enterprises, as well as managing EU fund absorption. One of its instruments, the ‘SME Portfolio Guarantee’, launched in May 2025, aims to reduce collateral requirements for underserved firms. It would be beneficial to consolidate other existing subsidised loan programmes under this institution. To ensure their effectiveness, all government-backed financing schemes should be narrowly targeted, closely monitored and regularly evaluated (see also Chapter 1) (OECD, 2024[29]).
Another important measure is the adoption of the National Strategy for the Development of the Capital Market (2023-2026), which outlines nine objectives, including improving listing conditions, increasing market liquidity, and supporting SME access to capital markets (Financial Supervisory Authority, 2023[36]). The National Financial Education Strategy (2023-2030), revised and relaunched in 2023, aims to strengthen financial literacy. As part of this effort, the National Bank of Romania introduced the ‘Antreprenoriat de TOP’ (TOP Entrepreneurship) initiative to enhance the financial and economic competencies of Romanian entrepreneurs.
Despite these promising initiatives, progress remains gradual, and further efforts are required to accelerate implementation. This should include the development of targeted training initiatives focused on practical financial skills for businesses – such as cash flow management, budgeting, and responsible borrowing – alongside mentorship programmes. Financial education could also be more effectively integrated into long-term adult learning frameworks (see discussion below). Additionally, promoting the adoption of accounting software can help simplify financial reporting for SMEs.
In addition to strengthening traditional bank-based intermediation and capital markets, Romania would also benefit from developing other financial instruments. This includes promoting asset-based financing solutions such as factoring and leasing (OECD, 2024[29]), supporting the development of fintech credit platforms, and establishing a robust regulatory framework for crowdfunding and peer-to-peer lending. Such instruments can offer flexible and tailored financial solutions for SMEs and innovative firms.
Still, addressing supply-side constraints on financing alone is not enough; demand-side barriers must also be overcome. This includes promoting business formalisation, improving financial reporting, reducing tax evasion, and strengthening the productivity and growth potential of domestic firms.
4.2.4. Further developing linkages between foreign and domestic firms
In addition to efforts aimed at enhancing the absorptive capacity of domestic enterprises (“enabling conditions”), targeted measures should focus on promoting direct linkages between foreign investors and domestic SMEs through network initiatives, online platforms, matchmaking services, or local supplier development programmes (OECD, 2023[38]). Romania has undertaken several initiatives in this area, particularly through networking and cluster development, including the creation of industrial parks. However, it has placed less emphasis on platform-based information services that support business linkages and improve access to local suppliers.
Regional peers offer instructive examples that Romania could draw upon. For instance, the Polish investment promotion agency (IPA) operates an online portal listing domestic firms and their offerings, enabling foreign companies to identify suitable suppliers for integration into their value chains (OECD, 2025[39]). Similarly, the Slovak IPA has launched an Innovation Services Platform that connects foreign enterprises with innovative Slovak firms for joint R&D activities (OECD, 2022[40]). While Romania has seen some private-sector efforts in B2B platforms, a more comprehensive, government-led online solution to link foreign investors with local suppliers remains absent.
The Romanian Agency for Investment and Foreign Trade (ARICE), Romania’s IPA, is currently preparing a new Foreign Investment Strategy. The strategy seeks to enhance the availability of investment-related information and establish a one-stop shop to streamline administrative procedures for foreign investors. While these initiatives are welcome, their impact could be amplified by integrating a comprehensive database of local suppliers and offering online access to profiles of Romanian SMEs. More broadly, ARICE could broaden its scope and resources to actively promote linkages between foreign investors and domestic enterprises – moving beyond its traditional focus on FDI attraction and investor servicing. Ireland’s IPA, IDA Ireland, is widely seen as a model in this regard, thanks to its focus on attracting investors and building linkages with domestic enterprises and suppliers. A strategy that concentrates solely on foreign affiliates, without parallel support for domestic firms, risks missing opportunities for broader knowledge spillovers (Cadestin et al., 2019[16]). This should be complemented by ongoing support for the internationalisation of domestic enterprises, which could build as much as possible on the many existing EU-level initiatives and platforms in this field (European Court of Auditors, 2022[41]).
Enhancing the absorptive capacity of the domestic economy depends on the availability of advanced skills. As Romania moves up the value chain, the demand for advanced technical, digital, and managerial competencies will grow. A modern, responsive education and training system plays a key role in aligning skills with the evolving needs of the labour market.
Romania starts from a challenging position, with a comparatively high share of individuals with lower levels of education and a still modest, though slowly increasing, share of higher education graduates, including among younger generations (Figure 4.15). However, over two-thirds of job openings expected to be created in Romania by 2035 will require at least a medium-level qualification (i.e. upper- and post-secondary education), while the remaining one-third will demand high-level education (Cedefop, 2025[42]). This rising demand is not expected to be matched by a sufficient increase in the supply of highly skilled workers, leading to growing shortages in high-skilled labour (Cedefop, 2025[42]).
Educational attainment of young adults aged 25–34-year-old, 2024 or latest available
Note: OECD and OECD CEEC are non-weighted averages. OECD CEEC covers Czechia, Hungary, Poland, Slovak Republic, and Slovenia.
Source: OECD Education at a Glance 2025 database.
Skills gaps are already emerging in some sectors. Although Romania’s job vacancy rate remains low – averaging 0.7% compared to the EU average of 2.5% in 2024 for the overall business economy – the share of enterprises reporting labour shortages as a constraint on their operations has tendentially increased over time (European Commission, 2025[43]). Finding available skilled staff is also reported to be one of the major obstacles to further investment by firms (European Investment Bank, 2025[44]). There are significant shortages in high-skilled roles such as ICT, commercial managers, and engineering professionals, as well as in some medium-skilled manual occupations like assemblers (Cedefop, 2024[45]). Outward migration continues to exacerbate shortages. Although 7% of tertiary graduates in 2023 specialised in ICT – one of the highest shares in the EU after Estonia, Ireland, and Finland – emigration continues to create shortages in the field.
Skill supply constraints are not solely attributable to low levels of educational attainment; low learning outcomes and deficiencies in foundational competencies also significantly undermine the development of a skilled workforce. Addressing skill shortages and raising the overall skill level of Romania’s population requires a comprehensive effort across all levels of education, including general education, vocational training and higher education, as well as a stronger emphasis on lifelong learning (André and Gal, 2024[46]). Building foundational skills also enhances labour mobility, a key channel for foreign-to-domestic knowledge spillovers.
Percentage of workers, aged 15 to 64, that have a qualification or field of study that does not match their job's requirements, 2019
Note: Field-of-study mismatch arises when workers are employed in a different field from what they have specialised in.
Source: OECD (2025[47]).
Skill mismatches, i.e. situations of overqualification or underqualification in the workplace, appear to be less widespread in Romania than in OECD countries, particularly in terms of overqualification rates, which are relatively low (OECD, 2024[48]). However, a significant share of workers in Romania are employed in fields not related to their study area (Figure 4.16). While this reflects labour market flexibility, it also highlights a misalignment between education and labour market needs and can have adverse productivity effects (Serikbayeva and Abdulla, 2022[49]).
4.3.1. Improving the performance of general education
Over the past decade, Romania has made significant improvements in strengthening its education system, yet it continues to face persistent challenges (OECD, 2025[47]). Enrolment rates in Romania are below the OECD average across all levels of education (Figure 4.17, Panel A). In the 2023-2024 school year, the enrolment rate in compulsory education (ages 3 to 18) reached solely 83% (Ministry of Education and Research, 2025[50]). Enrolment rates have remained relatively stable over the past decade. One of the most pressing issues is the high rate of early school leaving. Romania has one of the highest dropout rates in the OECD, particularly in upper secondary education and vocational tracks (see also Chapter 2). Nearly one in four students leave school before completing upper secondary education (OECD, 2025[47]), which is generally required to obtain the foundational skills for a meaningful participation in the labour market.
Student learning outcomes also remain below OECD and EU averages, according to PISA results. Romanian students score lower in reading, mathematics, and science (Figure 4.17, Panel B), and these outcomes are marked by important inequalities. Students from rural areas, socio-economically disadvantaged backgrounds, and Roma communities perform systematically worse than their peers. The performance gap between advantaged and disadvantaged students in Romania is one of the largest compared to OECD members. Low PISA scores are largely explained by the high share of students who score below the baseline level of proficiency (level 2) and the low share that reach higher levels 5 or 6 (OECD, 2023[51]). An estimated 49% of students did not meet minimum proficiency in mathematics, 44% in science and 42% in reading (OECD, 2023[51]). Foundational skills form the essential basis for all subsequent learning and professional development, and are instrumental in achieving basic qualifications (André and Gal, 2024[46]).
Note: In Panel A, OECD and OECD CEEC are non-weighted averages. OECD CEEC covers Czechia, Hungary, Poland, Slovak Republic, and Slovenia. Net enrolment rate is the percentage of children of the official age group who are enrolled in a given level of education.
Source: World Bank-UNESCO Institute for Statistics Education Survey; and OECD PISA 2022 database.
Tackling these multiple challenges in the education system requires broad-ranging changes to the system. Roman has launched a major education reform in 2023 (OECD, 2024[52]). The 2023 Law on Pre-University Education sets ambitious goals: reducing dropout rates, modernising curricula, strengthening teacher training and professional development, and increasing school autonomy and digitalisation. Another important component of the reform is the development of an integrated education data management system (Integrated School Management System) to improve data transparency and accountability (OECD, 2024[52]). Consolidating systemic data into a single platform can facilitate early educational diagnostics and the implementation of targeted policy measures.
The reform and its initiatives are ambitious and promising, though it remains too early to assess their impact. Success will depend on strengthening strategic planning within government by focusing resources on key priorities and ensuring effective delivery. Prioritising the enhancement of basic skills – through targeted initiatives and systemic reforms to modernise curricula and strengthening teacher capacity – is also critical, as solid foundational competencies underpin human capital development. Also, planned reforms to clarify responsibilities between central and county authorities should continue, enabling counties to play a stronger role in driving school improvement. The reform would also benefit from a stronger emphasis on monitoring. While individual initiatives are being monitored and evaluated, the reform lacks a comprehensive performance review that clearly links actions to strategic education objectives through a set of key performance indicators. Introducing a regular, overarching performance review aligned with well-defined metrics could substantially enhance the reform’s overall strategic orientation and efficiency.
Sustained and adequate funding for education is also essential. While increased spending does not automatically lead to better outcomes, a minimum level of spending is necessary to ensure quality education and sufficient learning outcomes (Égert, de la Maisonneuve and Turner, 2023[53]). Romania allocates one of the lowest levels of education spending per student (Figure 4.18). In 2022, average spending per student (in PPP) from primary to tertiary education in Romania was around USD 7 000, just half the OECD and EU average of USD 13 000 and significantly below that of regional peers. The Romanian government aims to increase education spending to 15% of total government expenditure by 2030 (Ministry of Education and Research, 2025[54]), up from around 8% (3.4% of GDP) in 2023, which would help bring per-student spending closer to OECD and EU levels. Given current fiscal constraints, securing sustainable financing for this needed increase is important. Increased financing should also be paired with politically challenging reforms of restructuring local school services and reviewing funding mechanisms (OECD, 2025[47]).
Public expenditure on educational institutions per full-time equivalent student, 2023 or latest available
Note: Data are expressed in current prices. OECD and OECD CEEC are non-weighted averages. OECD CEEC covers Czechia, Hungary, Poland, Slovak Republic, and Slovenia.
Source: OECD Education at a Glance 2025 database.
4.3.2. Strengthening vocational training and access to higher education
Vocational education (VET) is a key pillar of Romania’s education system, with 56% of upper secondary students enrolled in vocational tracks in 2023. The vocational system faces significant challenges, including high dropout rates, limited alignment with labour market needs, few work-based learning opportunities outside urban areas, and few opportunities for students to transition into higher education. VET continues to be widely perceived as a second-tier option within the education system, often associated with students who have limited opportunities.
In response, Romania has launched a series of reforms to modernise its VET system, notably introducing a dual education model in 2017, which combines school-based instruction with work-based learning. Traditionally, Romania’s VET system – like those in many countries in the region – was exclusively school-based. Still, dual programme enrolment remains low, at just 12% of vocational students in 2023, and varies widely across regions. This contrasts sharply with countries like Germany (89%), Switzerland (91%), and Austria (50%), where dual VET education is supported by strong institutional frameworks. Measures were also introduced with the 2021-2027 Education and Employment Programme to reduce early school leaving in VET.
One of the main challenges remains the limited structured partnership with employers and industry bodies for dual VET programmes. While Romania has made progress – new qualifications are initiated or revised at the request of employers and their associations, who also contribute to training standards and participate in certification commissions – these efforts are largely school-level or company-specific. Experiences from reforms in other countries in the region, such as Slovakia, demonstrate that systematically involving sectoral bodies or professional chambers, which are closely connected to business needs, is crucial for successful dual VET implementation. Romania should therefore build on existing mechanism by further strengthen collaboration between VET providers and industry organisations and chambers of commerce in the design and delivery of dual VET programmes, including development of curriculum and occupational standards. Enhancing these programmes by better integrating general skills – such as career guidance, digital literacy, and entrepreneurship – could also help boost their attractiveness to students.
Upper secondary and VET programmes in Romania also offer limited flexibility for students to move between different education pathways (OECD, 2025[47]). The recent legal framework of merging the two parallel upper secondary VET tracks (the 3-year VET programmes in Școală Profesională and the 4-year technological high school programmes) into a single technological high school pathway, set for the 2026-2027 school year, will be a positive step toward improving permeability (Cerkez et al., 2024[55]). This would allow students in the 3-year programme to stay at the same school and continue toward the baccalaureate without transferring. However, broader permeability across upper secondary education pathways, including transitions to more academically oriented tracks, remains limited (OECD, 2025[47]). Enhancing this flexibility would better support students seeking to change direction due to changing career goals and will play a key role in increasing entry rates to higher education (OECD, 2025[56]). The recent framework curricula, which establish a common core of disciplines for all upper secondary students, could help improve permeability. Nevertheless, it remains to be seen how these changes will translate into greater flexibility in practice.
The 2023 education law also foresees changes to the baccalaureate exam, making it more compatible with upper secondary VET programmes. To further strengthen pathways from vocational education to higher education, additional measures should be explored. One option could be the introduction of a combined vocational qualification and baccalaureate, similar to Germany’s Berufsabitur, which integrates four years of dual vocational training with eligibility for admission to higher education. A new professionally oriented model of higher education, which started in the 2024-2025 school year with bachelor’s programmes, also represents a step in the right direction, offering a coherent vocational pathway from upper secondary VET to higher education (ReferNet Romania and Cedefop, 2025[57]).
Some of the persistent challenges in the lower levels of the education system carry over into tertiary education, contributing to enrolment rates that remain below the OECD average, despite increases over the years. In 2023, enrolment among the 20-24 age group stood at 31%, compared to the EU average of 37%. The tertiary education sector also faces its own structural challenges, including a strong concentration of institutions in major cities, which limits access for students from rural areas, and a scholarship system that allocates a disproportionately large share (slightly less than three-quarters of all scholarships) based solely on merit, rather than on social need. Merit-based scholarships also tend to be higher than those awarded on social grounds. Experience in OECD countries shows that merit-based scholarships tend to disproportionately benefit students from wealthier backgrounds, although they might be able to afford the costs of education without aid (OECD, 2020[58]). Additional challenges include, among others, relatively low institutional autonomy, limited research activity and effectiveness, high dropout rates, and a limited policy focus on social inclusion (OECD, 2025[47]). On a positive note, Romanian universities produce a higher-than-average share of graduates in STEM and ICT fields and university graduates have very good employment opportunities and generally high employment rates after graduation.
The 2023 Law on Higher Education aims to address several key challenges in Romania’s tertiary education system, such as reducing dropout rates, expanding career counselling and guidance services, promoting STEM and ICT fields, and supporting the internationalisation of Romanian universities. To support the full implementation of the 2023 reform objectives, progress in several areas should be pursued. First, scholarship schemes should better target students with financial needs, while ensuring that all students have clear access to information on scholarship opportunities. Targeted outreach and support for disadvantaged and underrepresented groups should also be advanced, for instance by building on initiatives like the ‘First Student in the Family’ programme. Second, access for rural and regional populations could be further improved by further leveraging digital tools and expanding flexible and part-time study options. France and Denmark offer good examples of policy approaches in this respect (such as the French Campus Connectés). Third, enhancing institutional autonomy would allow universities greater flexibility in academic, financial, and administrative matters. Fourth, addressing dropout rates and low competition rates through strengthened student support services, such as academic advising, mental health resources, and adaptable learning formats, could help improve retention. The Irish case could serve as a strong example to further promote access to higher education (see Box 4.3).
Ireland exemplifies rapid growth in tertiary attainment, rising to 63% among 25-34-year-olds by 2023 – one of the highest in the OECD. In the early 2000s, it faced modest tertiary attainment, urban-rural disparities, high dropout rates, and limited institutional autonomy, challenges like those Romania faces today.
Key policies behind Ireland’s success are:
Free fees initiative: Introduced in the mid-1990s, this policy eliminated undergraduate tuition fees for most students, significantly reducing financial barriers to access.
Targeted grants and supports: Ireland has maintained a robust student grant system that supports low-income students, helping to improve equity in access.
Expansion of higher education institutions: The country invested in expanding its university and technological sector, including the creation of Technological Universities with regional campuses, to decentralise access.
Flexible entry routes: Ireland has promoted alternative access, such as recognition of prior learning and part-time study options and a preferential access route for underrepresented groups (‘HEAR’), making higher education more accessible to non-traditional learners.
Strong labour market linkages: Higher education institutions have developed strong ties with industry, particularly in ICT and pharmaceuticals, aligning programmes with labour market needs.
4.3.3. Improving lifelong learning and skill upgrading
Lifelong learning is essential for maintaining individuals’ attachment to the labour market throughout their careers and for enhancing productivity (Andrews, Balazs and de la Maisonneuve, 2025[59]). The technology-driven transformation, marked by the rise of generative Artificial Intelligence and the diffusion of digitalisation across all sectors, further reinforces the need for continuous reskilling and upskilling, even in the short- to medium-term. In Romania, on average around 12% of workers are considered at high risk of automation, meaning over 25% of their skills and abilities are highly automatable (OECD, 2024[48]). Stagnation in lifelong learning exacerbates skill mismatches, pushes low-skilled workers into high-skill roles, and discourages firms from investing in innovation, weighing on productivity and competitiveness.
Participation in lifelong learning in Romania has increased in recent years but remains low by international standards (Figure 4.19). In 2024, participation in education or training remained particularly low among rural residents (8%), low-qualified adults (4%), and the unemployed (5%), compared to 27% of tertiary-educated, 24% of urban residents, and 19% of employed individuals. While such disparities are common, they are especially stark in Romania. In contrast, top-performing OECD countries – like Scandinavian countries but also regional peers such as Estonia and Hungary – have been more effective in engaging disadvantaged groups in lifelong learning, where social returns are particularly high.
Romania’s Adult National Training Strategy 2023-2027 aims to double adult learning participation, by expanding flexible learning options, promoting awareness, and improving guidance services. Yet efforts remain fragmented. Further demand-side measures should strengthen employers’ training obligations and improve financial incentives. Currently, firms must offer training every two to three years, but compliance is weak (OECD, 2025[60]). Also, raising tax-deductible thresholds for training expenses could boost uptake. For individuals, targeted support – such as training vouchers for disadvantaged groups – would help address barriers to participation. Introducing Individual Learning Accounts, as in France, could help to accumulate entitlements to use them flexible over the career. On the supply side, improving training quality through stronger industry involvement and expanding access in underserved areas are key priorities. Given the significant digital skills gap, continuous digital learning should also be given greater emphasis (see above).
Participation rate in education and training (last 12 months), 2024
Note: OECD CEEC is the non-weighted average of Czechia, Hungary, Poland, Slovak Republic, and Slovenia.
Source: Eurostat.
Business dynamism is a key driver of competitiveness, as it facilitates the market entry and expansion of more productive firms while enabling the exit of less efficient incumbents. Moreover, administrative burden and regulatory costs associated with business entry, operation and exit also directly affect cost competitiveness.
Business demography indicators reveal high firm entry rates in Romania, while firm exit rates are below the EU average (Figure 4.20, Panel A&B). While this may suggest greater efficiency in the initial selection of firms, the persistent survival of older, undercapitalised and unprofitable firms points to weak market selection and structural deficiencies in insolvency proceeding. Surviving firms also tend to remain relatively small and generate less employment than their EU counterparts, highlighting limitations in scaling (Figure 4.20, Panel C). Smaller enterprises may lack the critical scale needed to connect with MNEs operating in Romania and to engage in export activities. Fostering a dynamic, growth-oriented business environment requires a regulatory framework that fosters entrepreneurship, competition, and firm expansion. Romania’s strengths and weaknesses in this area have also been examined in detail in previous Surveys (OECD, 2022[37]).
Note: All indicators for industry, construction and market services.
Source: Eurostat.
4.4.1. Further simplifying the regulatory system
Regulatory barriers to competition, as measured by the OECD Product Market Regulation (PMR) index, remain higher in Romania than both the OECD average and regional peers (Figure 4.21). However, the overall PMR score has improved between 2018 and 2023/2024 – by a larger margin than the OECD average – narrowing the gap with the OECD average to some extent.
Romania remains relatively restrictive compared to the OECD average and best-performing countries in what regards distortions induced by state involvement and administrative and regulatory burden, as well as barriers to entry in some services (Figure 4.22). Romania’s regulatory framework is comparatively more competition-friendly with respect to entry barriers in network industries, which are low compared to OECD countries, as well as in barriers to trade and investment. Notably, FDI and tariff barriers are substantially below OECD averages and close to best performing countries (see also Figure 4.8, Panel B).
Economy-wide PMR, index scale 0-6 from least to most restrictive
Note: OECD, EU and OECD CEEC are non-weighted averages. OECD CEEC covers Czechia, Hungary, Poland, Slovak Republic, and Slovenia.
Source: OECD-WG Product Market Regulation database.
2023/2024 PMR, index scale 0-6 from least to most restrictive
Note: OECD and OECD CEEC are non-weighted averages. OECD CEEC covers Czechia, Hungary, Poland, Slovak Republic, and Slovenia.
Source: OECD-WG Product Market Regulation database.
Starting and running a business in Romania remains more burdensome than in top-performing OECD countries, despite continued efforts to streamline and simplify procedures. Entrepreneurs must engage with multiple institutions – such as the National Trade Register Office (NTRO), the tax authority, and, in most cases, a notary and a certified digital certificate provider – and limited liability companies (LLCs) often require additional local approvals for business start-ups (OECD, 2025[61]). The NTRO’s role as a one-stop shop and the digitalisation of registration have significantly facilitated business registration. However, while the Trade Register Law sets a deadline, the absence of a legally defined maximum processing time for all procedures related to starting a business contributes to uncertainty and potential delays. Business Ready indicators confirm this: while the regulatory framework for starting a business has improved, operational efficiency – particularly in terms of time and cost – still leaves room for enhancement (World Bank, 2024[62]).
While business registration has become more streamlined and digital, Romania’s business licensing system remains highly fragmented and administratively burdensome, posing significant challenges for entrepreneurs. Licensing requirements are dispersed across multiple legal instruments and institutions, leading to inconsistencies in procedures and information. The lack of a unified platform forces businesses to consult various sources, often with unclear sequencing and incomplete guidance (OECD, 2026[63]). Any economic activity requires a functioning authorisation that is issued by local authorities, which often impose additional requirements to business (Romania Competition Council, 2023[64]). In addition, licensing approval times remain lengthy and many permits require periodic renewal, adding to the overall administrative burden (OECD, 2025[61]).
To start addressing these challenges, the government passed a Single Industrial Licensing (SIL) system (Law no. 98/2023), establishing standardised SIL processes based on risk categories (including a zero-licensing regime for low-risk activities), introducing clear tacit approval (“silence is consent”), adopting the once-only principle, and mandating license-sharing among public institutions (OECD, 2022[65]). The law also established the Office of Industrial Licensing (OLI) as the coordinating body for the establishment and issuance of the streamlined industrial licensing procedures. The single point of contact is expected to be operational by the end of the first quarter 2026. These reforms could lay the groundwork for extending simplified licensing to the commerce and service sectors through a comprehensive business licensing framework (OECD, 2026[63]).
As in other OECD countries, some barriers to entry exist in Romania’s service sectors, particularly in professional services (Figure 4.22). Romania is particularly more restrictive in terms of exclusive rights and regulatory requirements for notaries, accountants, architects and engineers compared to the OECD average (OECD, 2022[37]). Entry into retail services – especially in the sale of clothing and food and beverages – also remains relatively regulated (OECD, 2025[61]). Romania should reassess the necessity and proportionality of these barriers to strengthen competition in the service sectors.
Entry into network industries in Romania is relatively open compared to many OECD countries, especially in telecommunications, where barriers are very low. Regulatory requirements in energy and electricity are broadly in line with the OECD average, and the transport sector also shows relatively low entry barriers. As of July 2025, Romania liberalised inter-county land passenger transport, ending long-standing restrictions. Under the new framework, the Romanian Road Authority issues route licenses with clearer rules on scheduling, vehicle standards, and reserve capacity. This reform opens the market to more operators, aiming to improve service quality and encourage investment in modern fleets.
4.4.2. Strengthening the functioning of the insolvency framework
An effective insolvency framework is essential for supporting competitiveness and economic dynamism. It enables the timely exit of non-viable firms and the restructuring of viable but distressed businesses, thereby facilitating the reallocation of resources toward more productive uses (André and Demmou, 2022[66]). In well-functioning systems, insolvency procedures help preserve value, protect creditors’ rights, and support entrepreneurship by reducing the costs and uncertainties associated with business failure. In Romania, however, the insolvency framework remains suboptimal, despite some progress, with several structural inefficiencies (OECD, 2022[37]; National Bank of Romania, 2023[67]). Many firms remain in insolvency proceedings for long periods, often without resolution (Coutinho, Kappeler and Turrini, 2023[68]), and a significant number re-enter insolvency multiple times. Restructuring procedures are rarely used, and when they are, they tend to occur too late to be effective.
According to the OECD insolvency indicator, Romania performs below the OECD average in terms of insolvency efficiency, particularly in areas such as early warning and pre-insolvency rulings, use of restructuring, the degree of court involvement and the predictability of outcomes (André and Demmou, 2022[66]). These weaknesses contribute to a high prevalence of zombie firms – companies that are unable to cover debt servicing costs from current earnings over an extended period – and firms with zero or negative equity (National Bank of Romania, 2023[67]). Data from the NBR underscores the scale of the issue. As of 2024, approximately one-third of Romanian NFC had equity levels below the regulatory threshold (National Bank of Romania, 2025[32]), and a significant share – between 22% and 25% (depending on the definition used) in terms of the number of companies – met the criteria for being classified as zombie firms in 2022 (National Bank of Romania, 2023[67]). These firms continue to operate despite persistent financial distress, often due to weak enforcement mechanisms and limited incentives for timely restructuring or exit. Possible tax optimalisation strategies also play a role (National Bank of Romania, 2023[67]). The legislative package adopted in September 2025 establishes clearer communication between the NTRO and the National Agency for Fiscal Administration to facilitate the identification of such companies and the initiation of dissolution procedures.
Romania has made some progress in strengthening its preventive insolvency framework with the transposition of the 2019 EU Directive (Directive 2019/1023) into national law in June 2022 (Costea, 2022[69]). The reform introduced early warning tools, including free access to financial and legal advisory services and alerts from public authorities when signs of financial distress arise. These tools are non-binding and confidential, aiming to encourage timely intervention without fear of stigma or legal consequences. The reform also introduced two main out-of-court pre-insolvency procedures (Tirnoveanua and Iorgulescu, 2024[70]). Public data on early warning tools is limited, but use of pre-insolvency procedures appears to have risen in 2024 (Tirnoveanua and Iorgulescu, 2024[70]).
Despite progress on preventive mechanisms, challenges persist regarding the low uptake and lengthy duration of restructuring procedures, as well as the limited availability of tailored proceedings for SMEs (World Bank, 2024[62]). Enhancing the efficiency of insolvency processes – such as by streamlining court procedures and expanding the use of digital tools – should also remain a priority. Romania has also strengthened its approach to repeated insolvency filings through the transposition of the 2019 EU Directive. The new rules introduce “cooling-off” periods, limiting access to preventive restructuring within 12 months and judicial reorganisation within 5 years. Inspired by the French Commercial Code, these measures aim to prevent misuse of repeated filings. Further steps could include enhanced court scrutiny of viability, as well as shorter timelines and stricter creditor oversight for repeat cases.
4.4.3. Fostering competition and business growth
Romania’s competition policy framework is generally sound, with the Romanian Competition Council (RCC) playing an effective role in enforcing antitrust legislation, overseeing merger control, and addressing anti-competitive conduct. Though long considered relatively well-resourced in OECD comparison (OECD, 2022[37]), the RCC has seen a decline of about 10% in its case handlers between 2022 and 2024, with potential implications for caseload and enforcement capacity. At the same time, enforcement activity has intensified in recent years, particularly in sectors such as ICT, cement, and pharmaceuticals, alongside increased scrutiny of public procurement practices (Government of Romania, 2025[71]). Romania relies heavily on settlements to resolve competition cases, which on the one hand eases the burden on the judicial system and helps alleviate congestion that may otherwise contribute to longer ruling times, but on the other hand may also weaken deterrence, as firms anticipate reduced sanctions for infringements. As competition law continues to evolve with growing economic and technical complexity, ongoing training and capacity-building remain essential for businesses, authorities, and the judiciary alike.
Challenges to competitive neutrality persist in Romania’s government markets (OECD, 2025[72]). Public procurement, which has an important size of around 11% of GDP in Romania, remains a key area where legal provisions are fundamentally sound, but implementation falls short (OECD, 2025[72]). Competition is limited, as shown by a high share of single-bid procedures (45%, compared to the EU average of 38%) and of negotiated procedures without prior publication (23%, versus the EU average of 6%) (European Commission, 2025[30]). Barriers include excessively rigid or complex rules and selection criteria, non-standardised documents, financial and technical constraints, and corruption risks – all of which disproportionately affect SMEs and new entrants (OECD, 2025[72]). Frequent past legal changes – although the legal procurement framework has shown more stability since mid-2024 – and limited procurement capacity further undermine efficiency. Despite reform efforts, perceptions of corruption and limited access to bidding opportunities remain widespread (European Commission, 2025[30]; World Bank, 2024[62]).
Further improvements in the efficiency and accessibility of public procurement are necessary, as outlined in Romania’s Public Procurement National Strategy 2023-2027. Key priorities include enhancing the predictability of procurement calls, providing clearer technical guidance and realistic selection criteria to companies, allowing sufficient time for bid preparation and standardising documents. A more proactive engagement with markets, including training for SMEs, could also help to support their participation in public tenders. Additionally, continuing to strengthen capacity within contracting authorities is also essential (OECD, 2025[72]).
Infrastructure is a key driver of productivity and competitiveness (André and Gal, 2024[46]). Efficient transport infrastructure lowers logistics costs, broadens market access, and boosts labour mobility. Quality infrastructure also facilitates linkages between foreign firms and the domestic economy (André and Gal, 2024[46]). Despite recent progress and significant EU-funded efforts, Romania still records below-average infrastructure performance and show significant gaps in transport infrastructure. Romania’s below-average infrastructure performance contributes to weak logistics outcomes and results in comparatively higher cross-border logistic costs, as reflected in the International Transport and Insurance Costs of Merchandise Trade (ITIC) (Fiallos, Liberatore and Cassimon, 2024[74]) (Figure 4.23, Panel A&B).
Note: OECD and OECD CEEC are non-weighted averages. OECD CEEC covers Czechia, Hungary, Poland, Slovak Republic, and Slovenia. Panel B: ITIC measures transport and insurance cost across borders as percentage of the CIF value of imports (CIF/FOB margins). While ITIC does not capture domestic logistics costs, it shows cross-border logistics efficiency and cost pressure.
Source: World Bank Logistic Performance Index database; OECD International Transport and Insurance Costs of merchandise trade (ITIC) database.
4.5.1. Improving the road network and road pricing
Romania’s road network has seen notable improvements in recent years, particularly through its integration into the Trans-European Transport Network (TEN-T). As of the end of 2025, Romania’s motorway (and expressway) network reached a total length of 1 418 km (Romanian Motorway Info, 2025[75]). This marks a significant increase from previous years, with 199 km of new motorways and expressways opened in 2024 and 146 km in 2025, compared to an annual average increase of 54 km between 2007-2023. Further extensions are under way or planned. However, significant challenges remain in terms of low connectivity, quality, and implementation speed (see also OECD (2022[37])).
While Romania has made progress, it still has one of the lowest motorway densities in the EU, with only two international connections to neighbouring Hungary. Many national roads remain in poor condition, contributing to slow travel times and elevated accident rates, especially in the eastern and southern parts of the country. Maintenance of road infrastructure also remains a significant challenge, with funding often lacking for both the maintenance of newly constructed and the upkeep of existing roads. Continued investment, improved project management, and a stronger focus on maintenance and long-term financing are essential to accelerate progress and ensure that road infrastructure supports Romania’s competitiveness.
Road transport is also the dominant freight mode in Romania, accounting for about 46% of total freight transport (compared to 20% of rail freight transport, 19% inland waterway freight transport, and 13% of maritime transport in 2024). This reflects the country's strong reliance on trucks for both domestic and international logistics. Compared to other freight modes, road transport is significantly less environmentally friendly, contributing more heavily to greenhouse gas emissions and air pollution. While road use is not entirely free – both passenger cars and heavy goods vehicles must purchase an electronic vignette to access national roads and motorways – the current pricing model has a limited effectiveness and emissions have strongly increased in the transport sector (see Chapter 3). Vignette costs are based on vehicle type, weight, number of axles, and validity period, rather than distance travelled such as in other EU countries like France, Italy or Spain, offering little incentive to reduce road usage or shift to more environmentally friendly modes. Moreover, the revenues generated are generally low and insufficient to cover long-term maintenance needs.
Romania is currently rolling out TollRO, a new electronic toll system for heavy goods vehicles with distance- and emissions-based charges, aligned with the EU Eurovignette Directive. TollRO was initially scheduled for January 2026, but its implementation was postponed to July 2026. Similar systems in Germany and Hungary have proven effective in funding infrastructure and promoting more efficient, low-emission freight transport. Romania should fully implement TollRO. On top, the 2024 Survey proposed the introduction of a differentiated, performance-based tolling system for passenger vehicles and light commercial vehicles not covered by TollRO, based on Global Navigation Satellite System (GNSS) technology (OECD, 2024[29]). Revenues from both systems should be directly linked to road maintenance and infrastructure investment to ensure long-term financing and infrastructure quality.
Romania could further improve the efficiency of its road maintenance by adopting performance-based maintenance contracts, in which the government pays a fixed periodic fee based on the road meeting predefined quality standards, rather than reimbursing contractors according to the volume or frequency of maintenance activities (World Bank, 2023[76]). This model has proven effective in several OECD countries, such as New Zealand or Canada. Maintaining an updated database of national roads and their status would help identify needs and priorities, following the example of the Road Register in Estonia. Currently, the National Company for Road Infrastructure Administration uses internal project tracking systems, but these lack the integration, transparency, and analytical capabilities found in international best practices.
4.5.2. Promoting alternative transport modes and infrastructure management
Romania should more actively promote low-emission transport modes. Romania’s extensive rail network, a low-emission alternative to roads, suffers from decades of underinvestment and outdated infrastructure, leading to declining passenger traffic and underused freight potential (see also OECD (2024[29])). Despite current EU-funded efforts to modernise and electrify the network, progress has been slow due to administrative inefficiencies, fragmented planning, and institutional capacity constraints. The NRRP allocates EUR 3.5 billion for rail upgrades, but delays threaten completion before the August 2026 deadline, risking missed economic and environmental benefits of shifting transport from road to rail. EU-funded rail projects should be accorded higher strategic priority within the national reform agenda, given their potential to advance sustainable transport. To shift more transport from road to rail, Romania needs a more balanced pricing strategy, improved rail service, and a better rail connectivity within the European transport network. Further investment in low-emission public transport infrastructure in and around cities is also essential to ease congestion, enhance urban connectivity, and advance climate objectives (see Chapter 3).
Romania’s intermodal and logistics infrastructure also remains underdeveloped compared to other countries, limiting the efficiency of multimodal freight transport. Few terminals support seamless road, rail, and maritime integration. The Port of Constanța, Romania’s main seaport, serves as a major logistics node along the Danube-Black Sea corridor and benefits from established road and rail connections. However, the lack of intermodal facilities and integrated transport corridors constrains its full potential for regional and international trade. Targeted investment in intermodal terminals, supported by EU funds, would reduce logistics costs, improve modal shifts, and strengthen the role of Constanța as a regional transport hub. In this context, Romania should fully implement the Transport Programme 2021-2027, which seeks to close infrastructure gaps, enhance multimodal integration, and support the shift toward sustainable mobility (Ministry of Investments and European Projects, 2021[77]).
Romania’s infrastructure benefits from substantial EU and national funds, yet persistent administrative challenges continue to undermine the economic returns of these investments (see also Chapter 1). Delays in project approvals, cost overruns, legal disputes, and bureaucratic bottlenecks reduce the efficiency of infrastructure planning and limit the absorption of available EU funds. To strengthen infrastructure governance and maximise the impact of EU funding, Romania would benefit from more streamlined administrative procedures and enhanced local capacity to plan and implement projects effectively. Key priorities include improving planning efficiency and preparedness, accelerating digitalisation in fund management, and ensuring timely fulfilment of EU milestones – particularly under the NRRP. Given Romania’s tight domestic fiscal space, maximising absorption of EU funds and leveraging financing from multilateral banks remains a top priority. With RRF support ending in 2026, exploring alternative financing sources such as public-private partnerships (PPPs) could also help sustain investment momentum, diversify funding, and leverage private sector expertise. The introduction of official PPP guidelines in late 2024 and the July 2025 initiative to build a PPP portfolio mark positive steps in this direction.
If left unchecked, corruption can result in wasteful or inefficient public spending, an uncompetitive business environment and ineffective policymaking. Perceptions of corruption remain high in Romania, with 75% of respondents to a 2025 Eurobarometer survey viewing it as “widespread” (European Commission, 2025[78]), slightly above the EU average. While few report personally witnessing or experiencing corruption, 60% said they are personally affected by corruption in their daily lives (European Commission, 2025[78]). This suggests that in Romania as in other countries, corruption has grown more complex than the traditional notion of everyday bribery. Political parties, elected officials, healthcare, police and customs are perceived as the most impacted institutions (European Commission, 2025[78]).
Romania has taken significant steps to combat corruption over the last years, and 39% of Romanians view government efforts to combat corruption as effective, putting it above the EU average (European Commission, 2025[78]). The OECD Public Integrity Indicators (PIIs) show that Romania’s anti-corruption and integrity system is largely aligned with OECD standards and, in several areas, performs above the OECD average (Figure 4.24). The country has strong legal frameworks for managing conflicts of interest and ensuring integrity in the financing of political parties and election campaigns. Romania also has a strong legal framework for whistleblower protection transposing EU Directive 2019/1937, although challenges for whistleblower protection remain in practice (OECD, 2023[79]; OECD, 2024[80]). As part of its OECD accession process, Romania became a Party to the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions in 2023 and continues to make progress on combatting foreign bribery, although there is still room to improve practical application (OECD, 2024[80]). A recent amendment of Law no. 319/2024 strengthened protections for whistleblowers reporting foreign bribery.
Romania has also recently strengthened its framework for managing integrity risks in pre- and post-public employment, including for high-risk officials. As part of the OECD accession process, a new law (Law no. 189/2025) has been adopted in November 2025 to address several gaps previously identified by the OECD (OECD, 2025[81]). If effectively implemented and enforced, this new law – which expands the scope of at-risk officials, activities and behaviours covered – should help reduce economic distortions arising from “revolving door” between the public and private sectors.
Romania’s National Anti-Corruption Strategy (NACS) for 2021-2025 outlines government objectives for improving the anti-corruption framework. While the strategy fulfils most standard OECD criteria, strategic planning could be further improved by grounding the strategy in a formal assessment of national corruption risks (OECD, 2025[82]). Nonetheless substantial progress has been made toward achieving the objectives in the NACS, as outlined in the strategy’s monitoring reports (Ministry of Justice, 2025[83]).
Note: Panel A shows the point estimate and the margin of error. Panel C shows sector-based subcomponents of the “Control of Corruption” indicator by the Varieties of Democracy Project. OECD CEEC is a non-weighted average and covers Czechia, Hungary, Poland, Slovak Republic, and Slovenia.
Source: Panels A & B: World Bank, Worldwide Governance Indicators; Panel C: Varieties of Democracy Project, V-Dem Dataset v12; Panel D: OECD Public Integrity Indicators database (data extracted on 17 July 2025).
Despite the strong legal framework, Romania faces practical challenges in preventing and managing conflicts of interests. Effective management of conflicts of interest fosters fair competition and transparent decision-making, reducing the risk of favouritism or regulatory capture. The National Integrity Agency (ANI), responsible for verifying the content of asset and interest declarations, uses innovative tools for doing so (OECD, 2025[82]) but remains understaffed, delaying detection. To improve early detection, ANI has implemented a new IT tool that helps detect red flags in official’s declarations. While this can improve effectiveness, the system could be further strengthened by applying a risk-based approach, prioritising verification based on the sensitivity of an official’s position. Beyond oversight, building the capacity of public institutions and officials to proactively manage conflicts on their own – such as through voluntary recusal from decisions where a conflict of interest exists – would strengthen the system over time.
As reflected in citizen perceptions, corruption and integrity risks in the health sector remain particularly acute. These range from overt bribery to favouritism in human resource management, procurement and budget control that contribute to inefficiency and wasteful spending (OECD, 2023[79]). The NACS for 2021-2025 included a specific focus on the health sector, as well as the education sector and SOEs. Conflicts of interest remain common in the health sector, and further capacity-building and sector-specific guidance could be effective tools in reducing the vulnerability of the health sector to corruption. It’s encouraging that the Ministry of Health’s 2023-2030 strategy includes stronger conflict-of-interest management as a key objective.
A 2025 Constitutional Court ruling also declared key provisions of Law no. 176/2010 on conflict-of-interest management unconstitutional, including the publication of asset declarations of civil servants, citing privacy concerns. Information on assets and interests for at least some categories of public officials are published in around two-thirds of OECD countries (OECD, 2025[81]). Amendments to Law no. 176/2010, aimed at implementing the Constitutional Court’s decision, are currently under preparation and are expected to be submitted to the legislature in the second half of 2026. It is important that the publication of asset and interest declarations is proportionate to the decision-making power and risk exposure of public officials, maintaining a balance between transparency, integrity and the protection of fundamental rights.
Romania would also benefit from greater transparency in policymaking. Significant progress has been made, driven also by the OECD accession process, to tighten lobbying rules. Notably, registration in the RUTI register became mandatory as of April 2025 and has been extended to cover all members of parliament in October 2025. It remains important that the new lobbying framework will be enforced in practice. A robust framework for responsible and transparent lobbying is essential to safeguard policymaking from undue influence by narrow private interests. Lobbying in Romania is especially concerning given the high rate at which laws are adopted through fast-tracked procedures, used in 26% of laws (or 43% including Government Emergency Ordinances) (OECD, 2025[84]). Such practices limit stakeholder’s ability to provide input on legislation that affects them, and contributes to legislative instability, creating uncertainty for investors and discouraging long-term decisions. Restrictions on the misuse of emergency and shortened parliamentary procedures have started to be applied through methodological rules approved by the government in 2022. However, the proportion of draft normative acts adopted through Government Emergency Ordinances remained high in 2024, with only a slight decrease observed by October 2025 compared to the same period in 2024, and legislative unpredictability continues to remain a concern for investors and businesses (European Commission, 2025[85]).
When it comes to enforcement of criminal anti-corruption statutes, the National Anti-Corruption Directorate (DNA) has a strong track-record of successful prosecution of corruption cases (OECD, 2024[80]), and 51% of Romanians believe there are enough successful prosecutions to deter people from corruption – the second highest rate of all EU countries (European Commission, 2025[78]). While the DNA has faced some issues with resource shortages, it does not appear to have substantially impacted its ability to combat foreign bribery thus far (OECD, 2024[80]). The average length of criminal corruption cases in Romania remains only slightly above the EU average (European Commission, 2025[86]), indicating that the courts are generally able to ensure accountability for corruption within a reasonable timeframe.
Effective enforcement also relies on judges and prosecutors themselves acting with integrity. Romania has taken steps to strengthen integrity and independence in the judiciary more broadly. In 2022 Romania passed three revised “justice laws”, which aimed to bring the judicial system closer in line with international standards (OECD, 2024[80]; European Commission, 2025[85]). While Romania’s efforts to promote judicial and prosecutorial integrity are strong compared to the OECD average, there is still scope for further improvement. At the end of 2025, concerns were publicly raised regarding judicial and prosecutorial independence as well as the handling of corruption cases. This prompted the authorities to establish a working group to evaluate and review the concerns and relevant legislation. Romania could enhance its framework by extending merit-based selection procedures to the promotion of judges and prosecutors for all managerial positions and by ensuring sufficient safeguards for the appointment and dismissal of judges and prosecutors in managerial positions.
Money laundering remains also an issue in Romania, driven by various criminal activities, including tax evasion, fraud, and the misuse of EU funds (Figure 4.25). According to the Council of Europe’s MONEYVAL report, Romania is only “partially compliant” with 15 of the 40 Financial Action Task Force (FATF) recommendations and remains under enhanced follow-up procedures (Council of Europe, 2025[87]). Although Law No. 129/2019 provides a broad legal basis for prosecution, MONEYVAL notes that only limited progress has been made in addressing technical compliance deficiencies. Areas needing improvement include targeted financial sanctions, virtual asset regulation, and statistical tracking.
Note: Panel A summarises the overall assessment on the exchange of information in practice from peer reviews by the Global Forum on Transparency and Exchange of Information for Tax Purposes. Peer reviews assess member jurisdictions' ability to ensure the transparency of their legal entities and arrangements and to co-operate with other tax administrations in accordance with the internationally agreed standard. The figure shows results from the ongoing second round when available, otherwise first round results are displayed. Panel B shows ratings from the FATF peer reviews of each member to assess levels of implementation of the FATF Recommendations. The ratings reflect the extent to which a country's measures are effective against 11 immediate outcomes. "Investigation and prosecution¹" refers to money laundering. "Investigation and prosecution²" refers to terrorist financing. OECD CEEC is a non-weighted average and covers Czechia, Hungary, Poland, Slovak Republic, and Slovenia.
Source: OECD Secretariat’s own calculation based on the materials from the Global Forum on Transparency and Exchange of Information for Tax Purposes; and OECD, Financial Action Task Force (FATF).
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