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BCR analysis: Romania is behind Poland by 12-13 years for salaries and work productivity

Although Romania and Poland started at a similar level of GDP per capita in 1989, when the communist regimes fell, our country is now 7 years behind Poland at this chapter, while from the perspective of the salaries it is 13 years behind, an BCR analysis shows.

 

According to the BCR analysis, Romania and Poland are two economies almost similar, but with different stories. These are the biggest markets in Central and Eastern Europe with 20 million consumers in Romania, 38.5 million people in Poland respectively.

 

However, the share of the agricultural sector in the GDP of Romania is 4 times higher than in the euro zone and twice higher than in Poland. Both benefitted from lower foreign direct investment, with less than 5,000 euro per inhabitant, against the levels between 8,000 and 10,000 euro in the Czech Republic, Hungary and Slovakia.

As a result, as for foreign direct investments (ISD) Romania is a bit better, as it follows Poland with 5 years behind, but the BCR analysts warn that the gap will get larger most probably. On the other hand, Romania is well positioned to recover from the gap of services exports, but at present, this gap of development is of 6 years.

 

The gap in the case of services exports could be the only to be closed before 2019 ( when Romania is supposed to access the euro zone) as a result of the strong expansion of IT’ Eugen Sinca, senior analysts with BCR said.

 

The gap between Romania and Poland is huge

 

The gap between the average gross salary in Poland and the one in Romania is big enough, of approximately 400 euro, the BCR analysts considering that at present this gap is of 13 years. At present, the average gross salary in Poland is almost 900 euro, while in Romania is of 500 euro. By 2019, Romania has the potential to reach the average gross salary of almost 700 euro, but the gap will be significant, in the context of the slow reform of the education system and the lack of economy orientation to domains of high technology. At the same time, the increase of investments in agriculture and the restructuring of the state sector are essential for the improvement of work productivity. At present, the gap of productivity is high between Poland and Romania, of almost 12 years.

 

The potential of convergence of Romania is still valid, as a result of a development track similar to Poland. Romania should not miss any opportunity, should consolidate its country brand and to follow coherent public policies with the view to increasing the attractivity for investors. Not last, there is the reform of education and the increase of the degree of absorption of structural funds’ Radu Craciun, the head economist of BCR said.

 

The reform of public institutions and the reduction of corruption are key elements for the increase of the degree of absorption of structural funds.

 

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