Romania’s Government estimates that the GDP per capita at purchasing power parity (PPP) in Romania exceeded 65% of the European Union average in 2018. It also forecasts that the same indicator will exceed 70% of the EU average in 2021, under the forecast included in the 2019 -2022 Convergence Program passed by the Government on April 8, Economica.net reported.

Romania’s National Bank (BNR) has repeatedly explained that this indicator is critical for assessing the country’s readiness to join the single European currency (with a minimum benchmark set at 70%).

Nonetheless, the Government grounds its forecast on assumptions of GDP real growth rates of over 5% per annum (5.5% this year, versus just over 3% expected by international financial institutions). GDP expressed in EUR at purchasing power parity is calculated by converting a country’s nominal GDP in euros at the exchange rate that makes equal the consumer prices in both countries (Romania and the Euro area respectively). It intuitively provides a measure of GDP (the wealth generated by a country during a period) expressed in terms of goods rather than money.

Amid the high economic growth, Romania’s development gap compared to the EU average has narrowed, as in 2017 GDP per capita at purchasing power parity was 62.5% of the EU average, up from 55.9% in 2015 and 59.3% in 2016, the document reads.

editor@romania-insider.com

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