Romania's economy: a fifth of the workforce still farms

What Romania sells and who buys it

Goods exports came to 104 billion dollars in 2024, against 81 billion dollars in 2019, and what they consist of is narrow. Cars accounted for 10.1 billion dollars of the 2024 total, motor vehicle parts and accessories for 8.18 billion, insulated wire for 3.88 billion, electrical control boards for 3.27 billion and refined petroleum for 3 billion. Four of those five are inputs to or products of the European car industry, and the destinations say the same thing. Germany bought 19.1 billion dollars of Romanian goods in 2024, Italy 8.9 billion, France 7.27 billion, the United Kingdom 5.04 billion and Hungary 4.09 billion.

Assembly volumes climbed once foreign carmakers arrived. Romania produced 78,165 automobiles in 2000 and 410,997 in 2013, and by 2018 the turnover of the automotive sector was estimated at 28 billion euros, with 230,000 people employed in it. Romanian-based firms that have expanded across the region include Dacia, Petrom, Rompetrol, Bitdefender, Romstal and Mobexpert, and the export list beyond vehicles runs to software, clothing and textiles, industrial machinery, metallurgic products, military equipment, pharmaceuticals, fine chemicals and agricultural products.

Why the import list matters as much

The country bought 138 billion dollars of goods in 2024 while selling 104 billion. The largest single import was motor vehicle parts and accessories at 5.93 billion dollars, ahead of packaged medicaments at 5.1 billion, cars at 4.93 billion, crude petroleum at 4.67 billion and refined petroleum at 2.97 billion. Germany supplied 25 billion dollars of what came in, Italy 11.2 billion, Hungary 9.06 billion, China 8.79 billion and Poland 8.75 billion.

Parts arrive, work is done on them, parts leave. The plants occupy one stage of a production chain whose design, ownership and final assembly sit outside the country, and a stage can be moved. Exports fell by 3.52% between 2023 and 2024, a drop of 3.79 billion dollars, which is how fast the arrangement can contract when demand in Germany softens.

Why a fifth of the workforce farms

Agriculture accounted for 20.7% of everyone employed in Romania in 2023. The figure for the European Union as a whole that year was 3.9%, some 8.4 million people. Farming contributed about 4.4% of Romanian GDP in 2017, with services at 56.2% and industry at 30%, so a fifth of the labour force stands behind roughly a twentieth of output.

The reason sits in the structure of the holdings. Romania had 2.9 million agricultural holdings in 2023 out of 8.8 million in the whole Union, and 90.2% of them, about 2.6 million, were smaller than five hectares. The 1% of Romanian farms measuring 50 hectares or more worked 53.1% of the country's utilised agricultural area. That farmland came to 12.6 million hectares in 2023, 8% of the Union's 156.2 million, and slightly more than half of Romania's total land area was in agricultural use. Holding about a third of the Union's farms, the country generated 3.7% of its standard agricultural output.

Two farming systems are being added together in those numbers. One is a small set of large commercial operations working half the land: wheat on the Bărăgan plain, dairy, pork, poultry and apples in the west, beef in the centre, fruit, vegetables and wine from the centre southwards. The other is millions of household plots that feed the household before they feed a market, and it is the second that carries most of the employment share.

Rural conditions follow the same line. Unemployment stood at 8.9% in rural areas in 2022 against 3.2% in urban ones, and the employment rate for people aged 15 to 64 was 56.3% in the countryside against 68.6% in towns and cities. Urban residents made up 52.2% of the population in 2025, so the countryside is not a remnant. It is half the country.

How the farms became this small

The pattern was set by two redistributions and one confiscation. Land reforms between 1918 and 1921 broke up estates and transferred land to more than a million peasant households, and by 1929 agriculture still supplied 37.82% of value added and occupied 70 to 80% of the workforce. On 11 June 1948 every bank and large business was nationalised, and the collectivisation of agriculture followed from it, a sequence Romania: history sets out in full.

What exists now consolidates, slowly. Romania counted 1.4 million fewer farms in 2023 than in 2005, a fall of 33%, and the number of holdings rose in every size class above 20 hectares. Across the Union the same eighteen years removed 5.6 million farms, 39% of the total, and the average holding grew from about 11 hectares in 2005 to 18 hectares in 2023.

The land itself stays in production while the holdings disappear: the Union's farmed area shrank by 0.6% between those two survey years. Labour drains out at a similar pace. The volume of agricultural work in Romania fell by about 0.2 million annual work units between 2010 and 2023, a decline of 17.6%, close to the 19.1% recorded for the Union as a whole. On that trajectory the employment share falls for decades before it reaches the Union's average, which is why the 20% figure is a description of the present rather than a legacy about to disappear.

What comes out of the ground

The oldest part of the economy is underneath it. A systematic refinery was working near Ploiești by 1857, and the roughly 275 tonnes it handled that year stand as the first recorded commercial petroleum production anywhere. Output rose from 25,000 tonnes in 1887 to 1.848 million tonnes in 1913, installed electrical capacity from 851 kilowatts in 1888 to 61,657 kilowatts by 1913, and industrial output multiplied 9.6 times between 1893 and 1913, an average of 4.3% a year. Petroleum overtook cereals as the leading export by 1930. In 1908 Lazăr Edeleanu separated hydrocarbon groups from oil with sulphur dioxide, the first refining process of its kind.

What remains is a mature extractive sector. Oil and gas production has been falling for more than a decade, and the country has become a net exporter of natural gas. The pipeline network measured 2,427 kilometres for crude oil, 3,850 for petroleum products and 3,508 for natural gas in 2006. Mining in 2019 yielded more than 21 million tonnes of coal, about 1,300 tonnes of zinc, 460,000 tonnes of alumina and 3.4 million tonnes of crude steel.

Electricity is largely a state business, run through Termoelectrica, Hidroelectrica and Nuclearelectrica. Cernavodă is the country's only nuclear station, and the emphasis on nuclear power dates from the 1980s and the dependence on imported oil and gas. About a third of the energy produced comes from renewable sources, most of it hydroelectric. Wind capacity went from 76 megawatts in 2008 to 3,028 megawatts in 2016, with connection requests for more than 12,000 megawatts lodged and Dobruja carrying the strongest wind resource in the country. The countryside appears in the energy figures too: 48% of rural and small-town households burn solid fuel, almost all of it wood cut domestically, as their main source of heat and cooking.

Where the convergence came from

GDP per head in purchasing power standards was 44% of the European Union average in 2007, the year of accession, and 77% in 2022. On the World Bank series, GDP per capita at purchasing power parity rose from 13,703 dollars in 2007 to 47,903 dollars in 2023, reaching 50,895 dollars in 2025, with nominal GDP per head at 22,538 dollars and nominal GDP at 428.7 billion dollars in the same year.

Three things did most of that work. Accession on 1 January 2007 put Romanian production inside a single market of more than 447 million consumers, with tariffs and standards settled by membership. A flat tax of 16% on personal income and corporate profit replaced the progressive system on 1 January 2005, and the personal rate was cut to 10% in 2018. Foreign capital followed both: the stock of foreign direct investment stood at 81 billion euros in 2018, of which 63%, or 51 billion, was greenfield, and it reached 83.8 billion euros by June 2019. Investment ran at almost 25% of GDP in Romania in 2016 against 19% across the Union. Growth reached 7.7% in 2006 and 6% in 2016.

Convergence is uneven inside the borders. Output per head sits above the national average in Bucharest and the surrounding Ilfov county, and in Timiș, Argeș, Brașov, Cluj, Constanța, Arad, Sibiu and Prahova. It sits well below that average in Vaslui, Botoșani, Călărași, Neamț, Vrancea, Suceava, Giurgiu, Mehedinți, Olt and Teleorman. The counties on the second list are, with few exceptions, the counties where the small holdings are.

What the country buys on credit

The current account deficit reached 7.9% of GDP in 2025, and the European Commission forecast published on 21 May 2026 expects 6.9% in 2026 and 6.4% in 2027. The goods gap behind it was 34 billion dollars in 2024. The annual trade deficit has widened every year since 2014 and stood at about 18.77 billion euros in 2020.

Domestic demand is what the deficit buys. Falling interest rates and the spread of credit cards and mortgages made consumption easier through the 2000s, and a rise in the real estate market that began around 2000 has not reversed. Household consumption, not export earnings, has carried much of the growth, which is why the trade balance moves against the country in the years when incomes rise.

Food is the sharpest example of a country importing what it could grow. Romania imports substantial quantities of grain while remaining largely self-sufficient in other agricultural products and foodstuffs, and food imports were worth 2.4 billion euros in 2006, almost 20% more than in 2005. The Union takes 64% of Romanian agri-food exports and supplies 54% of agri-food imports. Two point nine million holdings feed their owners and a domestic market, and the processing and grain trade that would add value to them runs through somebody else's mills.

How the state pays for itself

The general government deficit reached 7.9% of GDP in 2025, with the Commission forecast of 21 May 2026 projecting 6.2% in 2026 and 5.8% in 2027. Gross public debt was 59.3% of GDP in 2025 and is expected to reach 63.4% by 2027. The comparison that shows how recent this is sits nine years back: the national budget planned for 2017 came to 422 billion lei, about 103 billion dollars, with a deficit of 1.1% of GDP.

Growth is not covering it. Real GDP grew 0.7% in 2025 and is forecast at 0.1% for 2026 and 2.3% for 2027. Consumer prices rose 7.2% in 2025 on the World Bank measure, and the Commission expects 7% in 2026 before a fall to 3.7% in 2027. Unemployment was 6% in 2025. Fiscal consolidation and energy prices together are forecast to cut real disposable income, and the consumption that has driven growth with it.

Monetary policy is still national. The leu was redenominated on 1 July 2005 at 10,000 old lei to one new leu, and one leu was worth about 0.2006 euros and 0.2278 United States dollars in April 2025. The National Bank of Romania held its policy rate at 6.50% on 10 August 2026, and its foreign exchange reserves stood at 64,865 million euros on 31 August 2026. Euro adoption was once hoped for in 2014 and has been postponed without a date; as of June 2020 the country met none of the five Maastricht criteria. The recovery and resilience plan commits more than 6 billion euros to digitalisation, including a government cloud programme of 600 million euros.

Who left and what it cost

The number of Romanians and people with Romanian-born ancestors living abroad is estimated at 12 million. Emigration began immediately after 1989, with 96,919 people settling permanently abroad in 1990 alone, and it has continued as labour migration ever since, leaving skills shortages behind it. The population stood at 19,053,815 on 1 January 2022, and it was shrinking by 0.2% a year in 2025.

Wages are the reason and the partial answer. The gross average monthly wage was 8,871 lei in February 2024 and 9,002 lei in August 2025, when the net average was 5,387 lei. The gross minimum wage has been 4,050 lei a month since 1 January 2025, which is close to half the average. Median wealth per adult was 20,389 United States dollars in 2021 against a mean of 42,351, and 35% of the country's 15.1 million adults held less than 10,000 dollars that year, an improvement on the 40% recorded in 2018.

The labour market that produces those wages is narrow at both ends. The employment rate for people aged 15 to 64 was 63.1% in 2022, 71.5% for men and 54.4% for women. Among people aged 15 to 24 it was 19.7%, and unemployment in that group ran at 22.8%. Education sorts the outcome more sharply than anything else: 89.5% of people with tertiary education were employed in 2022, against 64.6% with a medium level and 36.6% with a low one.

That is where the two economies finally touch. The export plants need trained workers and the small holdings hold a fifth of the workforce, but the movement between them has been small, and the movement that did happen went abroad instead. Convergence on European incomes has been achieved with foreign capital, a light tax on it, and a deficit; the part of the country that was supposed to be absorbed by growth has largely been absorbed by emigration.