Romania ahead of Poland in terms of GDP per capita

During the Concordia employers' federation conference in Bucharest, prof. Ionut Dumitru of the Romanian Academy of economical Sciences announced that Romania had overtaken Poland in terms of GDP per capita, having respect to purchasing power parity (PPS).

In the latest Eurostat ranking of 2023, Romania ranked 20th, just behind Estonia, while Poland ranked 21st. Hungary, Croatia, Slovakia, Latvia, Greece and Bulgaria were further included.

This means that Romania has made crucial economical advancement ahead of countries that were even richer than it was a fewer years ago. This is the consequence of dynamic economical growth following the country's entry into the European Union in 2007. However, does the advantage over Poland in terms of GDP per capita mean a higher standard of living?

Do Romanians gain more than Poles?

Although according to the purchasing power parity Romania overtook Poland, in fact wages stay lower. In 2023, the average yearly wage in Romania was EUR 17,7 thousand, while in Poland it was EUR 18,1 thousand. The difference is small, but it indicates that real incomes of Poles are inactive higher. For comparison, Greece had a wage of EUR 17 000 and Hungary had a wage of EUR 16.9 000.

It is worth noting that the purchasing power of individual people depends not only on nominal wages but besides on the cost of living. In Romania, prices of certain goods and services are lower than in Poland, which influences the final assessment of the standard of living.

Rapid growth in the mediate class in Romania

One of the key elements of Romanian economical success is the fast growth of the mediate class. As Prof. Dumitru pointed out, between 2007 and 2022 Romania recorded the top increase in the number of mediate classes among all the countries of the European Union. Nevertheless, it inactive ranks in its lower part (seventh place from the end) due to the fact that it competed from a very low level.

Such growth is due, among others, to economical reforms, abroad investment and unchangeable technological and industrial development. The introduction of a linear taxation could besides have an impact on economical growth. According to Dumitru, all 14 EU countries, where GDP per capita fell compared to the EU average, applied a progressive tax, which could have hampered development.

However, Romania's economical success does not mean that the country has avoided challenges. Since joining the European Union in 2007, Romania has seen 1 of the fastest GDP growths in the associate States. However, many citizens have decided to emigrate in search of better surviving conditions.

According to UN data, 2007-2017 Romania has left as many as 3.4 million people, accounting for almost 20% of the full population of the country. The main directions of emigration are Italy, Spain, Germany and the United Kingdom. The population flow has consequences – on the 1 hand it reduces unemployment and increases the inflow of remittances from migrants, but on the another hand it leads to a shortage of skilled labour, especially in the construction, medical and IT sectors.

Although Romania overtook Poland in 1 of the key economical indicators, this does not mean that the real standard of surviving of Romanians exceeds the standard of surviving of Poles. The wages in Poland are somewhat higher, and the Polish economy is more diverse and little dependent on the inflow of abroad capital.

At the same time, Romania has the possible for further development, especially if it manages to halt emigration and attract investment in more advanced sectors of the economy. Poland, in turn, has an advantage in the form of a more unchangeable labour market, greater human capital and a higher level of innovation. Ultimately, the economical future of both countries will depend on the effectiveness of the reforms implemented and the ability to adapt to the changing planet of the global economy.