Romania job losses reach 65,000 in one year

An analysis by the Consilium Policy Advisors Group (CPAG) reveals that approximately 65,000 jobs, representing 1.3 percent of the workforce, were lost in Romania over the past year. Most of these losses occurred within the private sector. During the same period, the number of unemployed individuals rose by approximately 51,000, a 10 percent increase.

CPAG estimates that these job losses result in an annual budgetary loss of at least 2.5 billion lei due to lost tax and social security revenues, lower VAT collections, and increased spending on unemployment benefits. While recent tax measures targeting consumption, labor, and capital helped reduce the budget deficit, the report suggests the economic cost has been higher than necessary.

Data shows that while VAT revenues grew by 0.8 percentage points relative to GDP, social security contributions fell from 11.1 percent to 10.9 percent of GDP. Despite access to EU recovery funds, Romania's average economic growth over the last three quarters was minus 0.5 percent, with annual growth averaging only one percent over the last three years. CPAG warns that further tax increases could trigger more economic decline and job losses, recommending instead improved VAT collection and structural reforms.