Romanian economy - the champion of the EU economic convergence

Abstract

Romanian economy presented a strong degree of resilience in the context of the outbreak of the exogenous shocks at the world level (coronavirus pandemic and the geo-political tensions) and their consequences (including the high level of the inflationary pressures). According to Eurostat database, Romania was one of the few countries with a continuity of the investment flows, including during the pandemic year 2020, despite the unprecedented high level of the uncertainty. At the same time, Romania was the champion of the European economic convergence process over the past decades, as reflected by the dynamics of the GDP/capita at purchasing power standards. This paper employs the Eurostat database and AMECO database and standard economic analysis tools (including the econometric filter Hodrick-Prescott) in order to assess the European economic convergence process of the Romanian economy over the past decades (from 1995 to 2023). According to the results of this analysis Romanian successful economic convergence process was determined by the huge inflows of capital flows with positive impact for the dynamics of the total productivity factor. Furthermore, the results show that at present the YoY pace of the potential output is at the highest level since 2008.