Romania's economy: one of Europe's growth engines

Romania's economy: in brief

"Romania is Europe's economic locomotive" is a sentence that sounds good, but the data tell a more precise story:

Over two decades, Romania is one of the fastest-growing economies in the EU. Between 2006 and 2025 its real GDP grew by 67%, against 25% for the EU as a whole. That is fourth place out of the 27 member states.
The gap in living standards is closing fast. GDP per capita, adjusted for purchasing power, rose from 44% of the EU average in 2007 to 78% in 2025.
The economic base is broad. Romania is the EU's largest gas producer, and leads in maize and sunflower area. It also produces more than half a million cars a year, and has one of the leading fibre-optic infrastructures in Europe.
But in 2024 and 2025 the locomotive slowed. Growth fell below the EU average. The deficit is the highest in the EU, inflation is still high, and all three rating agencies hold Romania at the lowest investment grade, with a negative outlook.

Our bottom line: Romania is not "Europe's locomotive". It has been one of the EU's strongest growth engines over the past twenty years, and it is now in a refuelling stop.

We hear the question "but is there a real economy there?" in many conversations with buyers from abroad, including Israelis. In this article we go sector by sector: agriculture, industry, energy, technology and finance. At the end we also come to the risks.

"Locomotive" or not? What 19 years of data say

Romania joined the European Union on 1 January 2007. To test whether it is a "locomotive", we compared its growth since then with the growth of the other member states, using Eurostat data.

Indicator	Romania	Comparison	Source
Cumulative real growth, 2006–2025	+67%	EU: +25%. 4th of 27, after Malta, Ireland and Poland	Eurostat, our calculation
GDP per capita in purchasing power (EU = 100)	44 in 2007, 78 in 2025	Poland 81, Hungary 76, Bulgaria 68 (2025)	Eurostat
Size of the economy, 2025	382.7 billion euros	12th in the EU, second in Central and Eastern Europe after Poland	Eurostat
Growth in 2025	0.8%	EU: 1.4%	Eurostat, INS
Bucharest-Ilfov region, GDP per capita (2024)	188% of the EU average	Among the 10 richest regions in the EU	Eurostat

A few things stand out in the table:

There were years when Romania really was first. In 2008 it grew by 9.3%, the highest rate in the EU. In 2017 Eurostat's preliminary figure showed growth of 7%, the highest in the EU at the time. After later revisions the figure stands at 8.2%, third after Malta and Ireland.

Closing the living-standards gap is the big achievement. Between 2007 and 2024 Romania rose 34 points in GDP per capita in purchasing power. Only Ireland rose more, and that is because of multinational corporations booking profits there.

Still, an engine and not a locomotive. Poland grew faster over the same period, and its economy is 2.4 times larger. And in 2024 and 2025 Romania grew more slowly than the EU average. We covered the current situation in 2026 in more detail in the article on Romania's economy in 2026.

Agriculture: from potatoes to sunflowers

Romania is an agricultural power, but not quite where you would expect.

Potatoes. They are part of Romanian cuisine. But according to Eurostat, Romania grew about 1.16 million tonnes of potatoes in 2025, about 2% of the EU harvest. That is ninth place. By cultivated area it is sixth, and the gap comes from the yield per hectare, which is among the lowest in the EU. In other words: potatoes are a story of small, traditional farming, not of export power.

Cereals and sunflowers. Here Romania is at the top:

Sunflowers: the largest area in the EU. In 2025 it was also the largest producer, with about 1.8 million tonnes. In 2023 and 2024 it was second and third.
Maize: the largest area in the EU, and third place in production (about 7.8 million tonnes in 2025), after France and Poland.
Wheat: fourth place, almost 13 million tonnes in 2025.

Romania also leads in exports. According to European Commission data published in July 2025, it was the EU's largest wheat exporter in the 2024/25 season, with about 5.4 million tonnes. Most exports leave through the port of Constanța, the largest port on the Black Sea. In recent years it also served as a main gateway for grain from Ukraine, and when that transit fell, so did the traffic: according to the port authority, about 67 million tonnes in 2025, against a record 92.6 million in 2023.

The other side. In 2023 Romania had 2.9 million farms, 32.6% of all farms in the EU. But they produced only 3.7% of its agricultural output, and 90% of them are smaller than 5 hectares. Agriculture produces 2.5% of GDP, twice the EU average, and employs about 10% of workers, more than any other EU country. That is both an opportunity and a sign that the economy is still in transition.

Industry: cars, parts and defence

Automotive. According to the carmakers' association ACAROM, 545,510 vehicles were produced in Romania in 2025: about 297 thousand at the Dacia plant (Renault group) in Mioveni, and about 248 thousand at the Ford Otosan plant in Craiova. In passenger car production alone, Romania was sixth in the EU, according to the European manufacturers' association ACEA.

Exports. According to the National Institute of Statistics (INS), Romania exported goods worth about 96.6 billion euros in 2025. 71% of exports go to EU countries, and almost half of them (46.6%) are machinery and transport equipment. That figure includes vehicles and spare parts.

Romania does not need the headline "Europe's locomotive". Twenty years of growth among the fastest in the EU are enough, and the deficit is part of the picture too.

The challenge. Industry (Manufacturing) produces about 15% of value added, close to the EU average. But in 2025 it contributed nothing to growth, according to INS. In August 2026, during the drought and the electricity shortage, Dacia and Ford halted production until 19 August, a step that eased the strain on the power grid.

Defence. This is the sector growing now. In May 2026 Romania signed loans of 16.68 billion euros from the EU's SAFE programme, the second-largest allocation after Poland. Germany's Rheinmetall is building a gunpowder plant with the state-owned Romarm in the town of Victoria, an investment of more than 500 million euros, with production planned for 2028. The Ministry of Defence budget for 2026 stands at 2.42% of GDP. We wrote about the security context in the article on Romania, NATO and the war.

Energy: the strong card

Here Romania stands out more than in any other sector:

Gas. According to Eurostat, in 2024 and 2025 Romania was the EU's largest natural gas producer, by energy content. It produced about 27% of the gas produced in the EU.
Import dependence. Only about 30% of Romania's energy is imported (2024), against 57% for the EU as a whole. That is one of the four lowest levels in the EU.
Neptun Deep. The Black Sea gas project of OMV Petrom and Romgaz, 50% each. The investment is estimated at about 4 billion euros, and the field holds about 100 billion m³ of gas. According to OMV, first gas is expected in the first half of 2027, followed by output of about 8 billion m³ a year.
Nuclear. The two reactors at Cernavodă usually supply about 20% of electricity. But in summer 2026 they were shut down, because the Danube's water level fell too low for cooling, and as of 15 October 2026 they are still shut down. In addition, Unit 1 will go into a two-year refurbishment from 2027, and two more reactors are planned.
Renewables. About 48% of electricity in 2024 came from renewable sources, at the EU average. According to the solar industry association, 2.2 gigawatts of solar power were added in 2025.

The combination of domestic gas, hydro and nuclear gives Romania a position most EU countries would like to have. But the 2026 drought showed that this strength too has a limit.

Technology: a leading sector, short of people

According to Eurostat, the information and communication sector produced about 7.6% of value added in Romania in 2025, against an EU average of 5.6%. The industry association ANIS estimates that IT and telecoms produced 6.67% of GDP in 2024, and that about 205 thousand people worked in the IT sector in 2025.

Names worth knowing:

UiPath: founded in Bucharest in 2005, and listed on the New York Stock Exchange since 2021. Its headquarters moved to New York.
Bitdefender: the cybersecurity company, founded in Bucharest in 2001.
Amazon: a development centre with more than 2,500 employees, in Bucharest, Iași and Timișoara.

Infrastructure. According to the European Commission's Digital Decade report (2026), about 96% of households in Romania have access to fibre to the home. That is first place in the EU. In 5G coverage, on the other hand, Romania is last.

The weakness. Only 2.7% of people employed in Romania are ICT specialists, against 5% in the EU. That is second from bottom. Since 1 January 2025 the income tax exemption for IT workers has also been abolished. The Commission's report links the fall in the number of specialists in 2025 to the removal of the benefits.

Finance: an emerging market that has not yet used its potential

The Bucharest Stock Exchange was upgraded by FTSE Russell to "Secondary Emerging Market" status on 21 September 2020.
Hidroelectrica, the hydroelectric power company, was listed in July 2023 for about 1.9 billion euros. That is the largest IPO in the history of the Bucharest exchange, and at the time the largest in Europe that year. At the end of 2025 the exchange's market capitalisation passed 100 billion euros for the first time, according to PwC. At MSCI, on the other hand, Romania is still classified as a "frontier market".
The banks are stable, but small relative to the economy. According to the National Bank of Romania's (BNR) financial stability report of June 2026, credit to the private sector stands at 22% of GDP, against 66% in the EU. That is last place in the EU.
Interest rates. BNR kept the rate at 6.5% on 8 October 2026.
The euro. The official target is 2029, but according to the European Central Bank's convergence report, Romania has not yet joined the exchange rate mechanism (ERM II) that precedes adoption. See Romania and the euro.

Infrastructure and EU funds

Motorways. At the end of 2025 Romania had about 1,416 km of motorways and expressways. 2024 was a record year, with about 195 new km. On the road that rings Bucharest, see the guide to the A0.
The recovery plan (PNRR). The plan has been cut several times, because of delays in reforms and investments: from 29.2 billion euros in 2021 to about 20.1 billion after the June 2026 revision, according to the European Commission. By the end of August 2026, about 13 billion euros had been received. In the 2021–2027 cohesion funds, Romania is entitled to 31.5 billion euros. The details are in the article on EU funds.
Schengen. A full member since 1 January 2025. See Romania in Schengen.

Work, wages and demographics

Population. 19.04 million residents on 1 January 2026, against 21.13 million in 2007 (Eurostat). According to a UN estimate, about 4.6 million Romanians lived outside the country in 2024, mainly in Germany, Italy and the UK.
Employment. Unemployment in 2025 stood at 6.1%, the same as the EU average, and at 6.4% in August 2026 (INS). But the employment rate, 69%, is the second lowest in the EU.
Wages. The average net wage reached 5,820 lei in July 2026, about 1,090 euros (INS). Because of inflation, the real wage fell compared with the previous year.
Regional gaps. The Bucharest-Ilfov region stands at 188% of the EU average in GDP per capita. The North-East region, the poorest of Romania's regions, stands at 48%. Ilfov county grew between the censuses from 388,738 residents (2011) to 542,686 (2021). See the article on Ilfov's growth.

The other side: the risks we do not hide

Deficit. 9.3% of GDP in 2024 and 7.9% in 2025, the highest in the EU in both years. Romania has been under the EU's excessive deficit procedure since 2020, and the target for correction is 2030. In June 2026 the Commission found that Romania had taken effective action towards correction.
Debt. 59.3% of GDP at the end of 2025. The debt is below the EU average, but rising fast.
Inflation. After the VAT increase and energy prices it reached 10.9% in May 2026, and fell to 6.2% in August. In September it rose again, to 6.6%, and BNR expects further pressures until the end of the year.
Rating. S&P and Fitch rate Romania BBB-, and Moody's rates it Baa3. All three affirmed the rating in 2026 with a negative outlook, and it is one notch above "junk".
Politics. The government was ousted in a no-confidence vote on 5 May 2026. Since then parliament has rejected three candidates for prime minister, and on 5 October a fourth candidate was put forward. As of 15 October the confidence vote on his government had not yet taken place, and most of the large parties had announced they would support it. See the political crisis in Romania.
Growth. In May 2026 the European Commission forecast growth of only 0.1% in 2026, and a recovery to 2.3% in 2027. The International Monetary Fund is more pessimistic: in its forecast of 13 October 2026 it expects a contraction of 0.5% in 2026, and growth of 2.2% in 2027. In the first half of 2026 GDP fell by 0.6% compared with the same period a year earlier.

Strengths	Weaknesses
Long-term growth among the highest in the EU	Weak growth in 2025, and forecasts of stagnation or slight contraction in 2026
The EU's largest gas producer, low import dependence	The highest deficit in the EU, excessive deficit procedure
An industrial base and exports to the EU	Inflation among the highest in the EU
Fibre optic in almost every home	A shortage of tech specialists, low credit
Bucharest-Ilfov, among the richest regions in the EU	Regional gaps, emigration, political crisis

So, locomotive or not? Our answer

If a "locomotive" is the country pulling Europe forward, that is Germany, by size, and Poland, by pace. Romania is something else: an economy that has grown by about two thirds since joining the EU, and closed a large part of the living-standards gap. It did this on a broad base of agriculture, industry, energy and technology. But part of the growth was financed by deficits, and now Romania is paying for them with slow growth.

The precise description is "one of Europe's growth engines over the past twenty years, now in a refuelling stop". If you hear someone say "Europe's locomotive" without qualification, ask them about the deficit.

What this means for someone buying a home near Bucharest

We will not talk here about yield or appreciation. Nobody can forecast them, and we do not present such forecasts. But the economy is the context of every home:

The economic base is concentrated around the capital. The Bucharest-Ilfov region is one of the richest in the EU, and Ilfov is the fastest-growing county in the country. The office hubs in the north of the city, such as Pipera, are close to the northern suburbs. See the guide to Pipera.
Infrastructure under construction. The A0 ring road, the M6 metro line to the airport and the expansion of Otopeni airport. Some of them are EU-funded, and each has a timetable that has slipped before.
Stability factors. Membership of the EU, NATO and Schengen, public debt below the EU average, domestic energy production.
Risk factors. High interest rates, taxes that rose twice in the past year, a caretaker government and a euro-shekel exchange rate that changes. On the implications for mortgages and payments, see euro instalments and currency risk, and on the market itself, the transition year in property.

Our rule does not change: buy a home that suits you even without the optimistic scenario. The Romanian economy is a background, not a promise.

In our project

Compass on the Lake is a project of 29 villas on a lake in Balotești, north of Bucharest, by the developers Moti Azulay and Attorney Ilan Leibovitch. The project has a building permit, and handover is staged, starting from December 2027, in phases. Buyers from Israel can get up to 70% financing from a Romanian bank, subject to the bank's approval.

Want to go through your questions? Book a meeting with us on ZOOM or face to face in Israel.

Frequently asked questions

Is Romania really Europe's economic locomotive?

Not in the literal sense. It is one of the fastest-growing economies in the EU since 2006, with 67% real growth against 25% in the EU, but in 2024 and 2025 it grew more slowly than the average. The precise description is "one of the growth engines".

How rich is Romania compared with the EU?

According to Eurostat, GDP per capita in purchasing power reached 78% of the EU average in 2025, up from 44% in 2007. In the Bucharest-Ilfov region the figure is 188% (2024).

Does Romania grow a lot of potatoes?

Less than people think. In 2025 it was ninth in the EU, with about 1.16 million tonnes. Its agricultural strength is in maize, sunflowers and wheat, where it is at the top of the EU.

What is the energy situation in Romania?

Better than in most EU countries. It is the EU's largest gas producer and imports only about 30% of its energy. The Neptun Deep project is expected to start producing gas in 2027. The Cernavodă reactors were shut down in summer 2026 because of the low water level in the Danube.

What are the main risks in Romania's economy in 2026?

The highest deficit in the EU, inflation of 6.6% (September 2026), a credit rating at the lowest investment grade with a negative outlook, and a political crisis since May 2026.

When will Romania adopt the euro?

The official target is 2029, but Romania has not yet joined ERM II, and is under the excessive deficit procedure. There is no binding date.

The bottom line

Romania does not need the headline "Europe's locomotive". The real figures are enough: twenty years of growth among the fastest in the EU, a broad base from wheat to fibre optics, and a fiscal and political crisis that is not over yet. Anyone who understands both sides can make a decision. Anyone who knows only one of them would do well to stop and check.

Moti Azulay, Compass Group Romania

Sources and data: Eurostat: GDP, growth and breakdown by sector (nama_10_gdp, nama_10_a10) · Eurostat: GDP per capita in purchasing power (tec00114) · Eurostat: regional GDP (nama_10r_2gdp) · Eurostat: crop production (apro_cpsh1) · Eurostat: farms and farmland · Eurostat: agriculture's share of GDP · Hellenic Shipping News: grain exports 2024/25 · Curs de Guvernare: vehicle production 2025 (ACAROM) · ACEA: market report 2025 · Money.ro: exports 2025 (INS) · The Diplomat: the SAFE agreement · Rheinmetall: the Victoria plant · Eurostat: gas production (nrg_cb_gas) and energy import dependence (nrg_ind_id) · OMV: Neptun Deep · World Nuclear Association: Romania · Nuclearelectrica: the reactors remain shut down, 11.10.2026 · pv magazine: solar 2025 · European Commission: Digital Decade report 2026, Romania · Curs de Guvernare: ANIS study · Bitdefender: 20 years · Amazon: Romania · The Diplomat: the FTSE Russell upgrade · FEAS (Bucharest Stock Exchange announcement): the Hidroelectrica IPO · BNR: financial stability report, June 2026 · Digi24: the interest rate decision, 8.10.2026 · European Central Bank: convergence report 2026 · European Commission: Romania's recovery plan · Euronews România: PNRR funds received · Financiarul: the port of Constanța · RVO (Dutch government): ports of Romania and Bulgaria · NewMoney: exchange capitalisation (PwC) · MSCI: market accessibility review 2026 · 130km.ro: motorways 2025 · Eurostat: deficit and debt · European Commission: spring 2026 forecast for Romania · IMF: World Economic Outlook, October 2026 · ZF: the IMF forecast for Romania, 13.10.2026 · European Commission: the excessive deficit procedure · ZF English: inflation, May 2026 · News.ro: inflation, August 2026 (INS) · ZF English: inflation, September 2026 (INS) · Mediafax: inflation, September 2026 (INS) · S&P, 2.10.2026 · SeeNews: Fitch · ZF English: Moody's · Euronews: the government ousted, 5.5.2026 · Washington Times (AP): the fourth nominee, 5.10.2026 · Reuters: support ahead of the vote, 15.10.2026 · Bursa.ro: GDP in Q2 2026 (INS) · Eurostat: unemployment and employment · Financiarul: average wage, July 2026 (INS) · Bursa.ro: unemployment, August 2026 (INS) · Prague Process: the Romanian diaspora (UN DESA) · ZF English: Bucharest-Ilfov 187.7%

This article is for general information only and is not legal, tax, financial or investment advice. The data are correct as of 15 October 2026, and some are preliminary and may be revised. Past data and economic forecasts do not guarantee future prices or results. Before any transaction, we recommend consulting an independent lawyer and an accountant or tax adviser.

This article is general information, not legal, tax or financial advice. Consult local professionals before any transaction.

What makes Romania one of Europe's growth engines?