Romania’s 800% GDP Growth With A Pinch Of Salt
Andrei Buruian?
Seasoned Professional in Financial Services - 16 Yrs. | Personal Finance Consultant & Speaker | Licensed Trainer | Content Creator | Passionate Networker
A chart depicting GDP growth among EU states between 2000 - 2022 went viral a couple of days ago.
According to Amazing Maps, that used Statista figures, Romania's economy grew almost 8 times between 2000 and 2022, 788%?to be more exact, placing it first among the other EU member states.
By all means, that is good news indeed. But is it really that good?
First of all, the GDP growth, although denominated in US dollars, is in current prices, that is, not adjusted for inflation.
I took the liberty of doing my own math around Romania’s GDP growth, in local currency and, at the same time, adjust it for inflation.
According to Wikipedia, quoting the National Institute of Statistics, Romania’s GDP was about 116 billion RON in 2000 and is expected to reach 1,396 billion RON in 2022, according to the National Commission for Strategy and Prognosis. That means an 11 fold growth.
At the same time, in the same interval, Romania’s inflation grew almost 7 fold, according to official NIS data and the NBR projection (for 2022).
My point here is that a more realistic figure would be in the vicinity of 400% growth, in local currency, half of what Amazing Maps produced.
Secondly, and this is my citizen self talking, what I believe matters is how much of the economic growth is transferred to the welfare of the population.
The indicator I choose to look at is the Human Development Index (HDI), where Romania, as of 2021, ranks 53rd in the world and second last in the EU, surpassing only Bulgaria.
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Although Romania’s HDI rose from 0.715 in 2000 to 0.821 in 202, an increase of almost 15%, it is not enough to match its economic growth.
Just as a short reminder, the simplified composition of the HDI:
- longevity / life expectancy;
- education / schooling;
- gross national income per capita.
In my opinion, these should be the main axes of Romania's development in the future, so that we can really enjoy the effects of economic growth.
Last but not least, let us not neglect the current GDP composition, where consumption accounts for 90% of total, with 80 p.p. retail consumption.
So, as a conclusion, I choose to take the chart with a pinch of salt and not to praise high economic growth, unless it actually makes it into the quality of life.
Photo sources: Amazing Maps with Statista (cover photo) and UN data (photos 2 and 3).
entrepreneur / senior leader - reliable achiever – mentor - enthusiast dreamer - self-learner - boundaries breaker - human rights activist
2 年Please provide the data supporting this. Thank you
Country Manager at TQA
2 年Da, eu imi amintesc anul 2002 cand m-am angajat si aveam un salariu de 200 euro /luna. Si asta era un salariu excelent. Eu zic ca Romania a progresat enorm in 20 de ani. Inflatia in anii '97 -2000 era cu 3 cifre, 10-15% de anul asta este parfum. Cred ca Romania e pe drumul cel bun si mai cred ca aceasta crestere economica este decuplata de politic (un lucru minunat de altfel).
CEO
2 年Search for the same map of Europe 20 years ago and you will be shocked by the progress of Romania... https://m.zf.ro/companii/harta-puterii-de-cumparare-in-europa-in-2022-in-romania-au-mai-ramas-21281749
CEO
2 年It's always a Romanian and not a foreigner who will try to challenge whatever good happens in hia country.... The GDP is measured with international standards, not how each of us "chooses to". For everyone who is not "blind", Romania is one of the success stories in Europe, as its progress is tremendous. The "blind" ones can search for pinches of salt, despite the fact that their own life got better even more than 800% in the last 22 years...