Analysts: Romania’s GDP to slow down during the next decade due to depopulation

Romania’s population has reached a 50-year low at the beginning of this year, of 19.5 million, due to negative natural increase and large migration, and this trend will have a large impact on economic growth during the next decade by mitigating potential GDP growth rates, Banca Transilvania’s analysts said in a research note released on Thursday.

Romania’s population declined by 120,700 inhabitants in 2017 compared to the previous year, due to demographic decline and emigration, according to official data.

On January 1, 2018, the resident population in Romania totaled 19.52 million people, compared with 19.64 million one year earlier. This means that the Eastern European country lost 0.6 percent of its population, or the equivalent of the population of a county capital city like Suceava, in just 12 months.

The main cause of this decrease is the negative natural increase, the number of deaths exceeding the number of births by 71,125.

Also, the migration of Romanians to wealthier Western European countries added other 53,381 inhabitants to the negative population balance last year.

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Economists warn this trend is affecting the economic growth, as many of the Romanians fleeing their country are highly educated people.

“These developments, together with the aging phenomenon (the share of the population aged over 65 increased from 17.8 percent in 2017 to 18.2 percent in 2018) will adversely affect the potential GDP dynamics over the next decade (downward trend to 3% y/y),” Banca Transilvania analysts said.

Around 3.4 million Romanians have gone abroad between 2007 and 2015 to escape poverty and corruption in their country, according to a recent UN International Migration Report.