ING economists Valentin Tataru and Stefan Posea describe Romania’s transition from a consumption-based and labor-intensive model to a capital-intensive and productivity-based economy. They expect frail GDP growth in 2026 and a moderate recovery in 2027, with automation and the adoption of artificial intelligence enabling higher production without commensurate employment growth and limiting broad-based job creation even in a future boom.

Structural slowdown with technology-led adjustment

“Romania’s macroeconomic landscape has changed rapidly over the past year. Economic growth, previously driven by consumption, is now constrained by tightening fiscal policy, weaker domestic demand and a cooling labor market. While some of this correction reflects the economic cycle, the slowdown also points to a deeper structural change: companies are increasingly relying on automation and artificial intelligence to increase productivity.”

“This correction looks likely to continue in 2026, when we expect GDP to grow by only 0.6%. A more significant recovery of around 2.8% is likely in 2027, when inflation moderates, monetary policy eases and EU-funded projects come to fruition. However, even with higher GDP, job creation may not follow past patterns.”

“During the current slowdown, companies are implementing automation and artificial intelligence in their operations. When demand recovers, they may be able to increase production using newly implemented technological potential, rather than triggering large waves of hiring. The historical relationship between GDP growth and job creation may be weakening at the moment.”

“This is not necessarily a negative. Romania is facing a shrinking and aging workforce, and increasing productivity is essential to maintaining growth and living standards. The current adjustment represents a necessary transition from a consumption-based and labor-intensive model to a more capital-intensive and productivity-based economy.”

“Weak job creation and low real incomes will be a constraint in the near term. However, at a deeper level, Romania is undergoing a structural shift away from a labour-intensive growth model. As companies rely more on technology, automation and higher-value activities, economic growth will increasingly be driven by higher production per worker rather than the absorption of more workers.”

(This article was created with the lend a hand of an artificial intelligence tool and has been reviewed by an editor.)