Romania’s regions. Bucharest is now richer than Budapest, Banat and Transylvania are more developed than most of Hungary, EU data show

Some regions in Romania register a fast development and are now richer than most neighboring countries. Bucharest was richer than Budapest in 2017, while Banat and Transylvania are more developed than most regions in Hungary, according to a fresh Eurostat report.

Romania has already some regions which could be considered “developed” by international standards, in a moment when the whole country is preparing to enter leave the status of a “upper-middle income” and enter the superior category.

However, many other parts are lagging behind and could be considered poor even by local standards.

Bucharest, the Capital city of the Eastern European nation, is by far the richest part of the country. The 2-million city had a gross domestic product (GDP) per inhabitant of EUR 22,000 in 2017, more than twice bigger than the national average of EUR 9,600.

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But considering real GDP per capita (at purchasing power standard – PPS), the Capital city region – București-Ilfov – was considered by EU standard a very developed region, by 44 percentage point above EU development average – and by 5 percentage point above Budapest.

In fact, the region of Bucharest was already slightly above EU average in 2007, the first year after Romania’s EU accession.

But the rest of the country was considered poor by any EU standard, with real GDP per capita (at purchasing power standard – PPS) levels between 27 percent (Nord-Est region) and 48 percent (Vest region), according to Eurostat data.

In 2017, income inequality between different regions in Romania has become a growing problem, even if the poor regions of Romania are less poor from how they looked ten years ago.

Eurostat data show that Nord-Est (a large part of Romania’s Moldova), the poorest area in Romania and EU’s fifth poorest region, was only 39 percent of EU average in terms of development in 2017, compared with 144 percent for Bucharest region, 67 percent for Vest / Banat region (including the rich Timișoara-Arad area), 60 percent for Centru region (southern Transylvania), 56 percent for Nord-Vest (northern Transylvania), 53 percent for Sud-Est region (including the rich port of Constanța), 50 percent for Sud-Muntenia and 45 percent for Sud-Vest-Oltenia region.

Compared with 2007, Vest region’s GDP per capita in PPS rose by 19 percentage points (pp), from 48 to 67 percent of EU average, and Sud-Est by 17 pp.

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In 2017, only two out of eight Romanian regions are still included in top 20 EU poorest regions.

“After North-West in Bulgaria (31 percent of the average), the lowest regions in the ranking were Mayotte in France and North-Central in Bulgaria (both 34 percent) and another region in Bulgaria: South-Central (35 percent). Among the 20 regions with GDP per capita below 50 percent of the EU average, five were in Bulgaria, four each in Greece and Hungary, three in Poland, two each in France and Romania,” Eurostat said in an official report.

In fact, Eurostat data show that, in 2017, Romania’s Vest region was more developed than 6 out of 8 regions in Hungary – the exceptions being Budapest and Nyugat Dunántúl.

In the same time, the both Transylvanian regions in Romania (Centru and Nord-Vest) vere more developed than 5 out of 8 Hungarian provinces.

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No real convergence strategy

But Romania is still EU’s third poorer nation – after Bulgaria and Croatia, in the same GDP at PPS/capita standard -, even if, within a decade after joining the European Union, the economy grew quickly and managed to become the largest in its region.

Economists say EU accession helps real convergence, but a good national economic strategy is key to achieve economic and social development.

“Advances in real convergence are largely determined by the growth strategy implemented by the countries themselves”, wrote Carmela Martin and Ismael Sanz, in ”Real Convergence and European Integration: The Experience of the Less Developed EU Members” study.

In Romania’s case, no real national strategy emerged so far to address large regional differences, and the disparities between poor and rich areas have chances to become greater, experts estimate.

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