Remarks by Antonella Bassani, World Bank Vice President for Europe and Central Asia, at 'Romania: Economic Growth Based on Competitiveness' Event

Your Excellency, Mr. Prime Minister- Distinguished Ministers,

Excellencies, colleagues, and friends,

Thank you for convening us at such a decisive moment for Romania.

Over the past two decades, Romania has delivered one of Europe's most impressive convergence stories. Income per capita has risen from less than 30% of the EU average to nearly 80% in purchasing power terms. Few countries have moved so quickly from the margins toward the European economic core, and few countries have managed to escape the middle income trap. But Romania did achieve to do both, and the World Bank Group is proud to have accompanied Romania on this journey.

This is a success story. But it is also a turning point for the country.

Romania's growth model, that has served the country so well, is now challenged. Fragmented global value chains, a structural slowdown in EU economies, and demographic trends are challenging its existing growth model. In parallel, rapid technological change is reshaping the global economy. Digital tools, automation, and AI are changing how companies compete and how people work. These changes create powerful opportunities for productivity and better-paying jobs, but they also raise the cost of inaction for both firms and governments.

To reboot productivity growth and competitiveness, we believe that Romania needs to engage in a new growth cycle that includes investment, the infusion of new ideas and technologies, and innovation. This means shifting the economy towards products and services differentiation by investing in R&D, human capital, and technology. Public sector reforms, institutional strengthening, and accelerated investments are essential for this transition, which will also require Romania to facilitate market contestability and creative destruction. Continued investment in education quality, vocational training, digital skills, and managerial capability is also essential. Without strong skills, innovation cannot be scaled.

Romania has what it takes to succeed, but adapting is essential to sustain long-term growth.

Against this backdrop, Romania has taken hard but necessary decisions to stabilize public finances through a bold fiscal consolidation program. These steps are already paying off. The fiscal deficit is declining toward approximately 6% of GDP in 2026- down from 9.3% in 2024 and coming in below the target agreed with the EU.

The quality of fiscal adjustment matters as much as its scale. The composition of spending was deliberately rebalanced in favor of productive investment, while structural revenue reforms were pursued in parallel. This is the kind of sequencing that helps build credibility with markets, with European partners, and with citizens alike. These directions are what the WBG points to in its analytical and advisory work.

Indeed, this economic recovery package aims to ensure that Romania remains a destination for high-value private investment, keeping its borrowing costs low and its credit rating high. A skyscraper needs to be built on a solid foundation - and Romania's ongoing fiscal consolidation is the solid foundation on which Romania can keep building its growth skyscraper.

But stability must be matched with efforts to foster productivity and innovation. The central question before us is this: how can Romania re-ignite growth when fiscal space is tight, external conditions are volatile, and the old growth model no longer delivers the same returns?

Two sources of growth financing should sit at the heart of this strategy: full and efficient mobilization of EU funds, and stronger private investment, both domestic and foreign.

The public sector cannot drive scale on its own. The key is to use public resources strategically-to catalyze private investment, not substitute for it.

How can the World Bank Group support this process:

• First, by supporting reforms and policies that support productivity, innovation and private capital mobilization.
• Second, by helping to ensure effective use of scarce public resources - when fiscal space is constrained, priorities matter: competition, skills, firm upgrading, and energy efficiency should come before lower-impact spending.
• Third, by helping to structure projects so they attract private investment. Guarantees, blended finance, and risk-sharing tools can help reduce risk and uncertainty, and unlock funding, including for SMEs, green investment, and innovation.
• And fourth, by supporting the effective use of EU funds. The scale of resources available to Romania is historic, but success is not measured by money spent-it is measured by impact and results. The most effective programs will be those that help firms upgrade, adopt new technologies, and strengthen workforce skills, turning investment into lasting productivity gains and well-paying jobs.

At this stage of development, Romania's main constraint is no longer access to capital or education. It is productivity.

Romania already has many of the essential ingredients. It has talented people, engineers and entrepreneurs, as well as a strong ICT sector, access to the EU market, and unprecedented EU funding. The task now is to turn these strengths into higher productivity, the creation of well-paid jobs and rising living standards for all Romanians.

Today's gathering brings together leading researchers, practitioners, investors, innovators, and experts from the European Commission and the World Bank Group-to share their knowledge and help chart solutions on how to re-ignite growth and productivity in Romania.

Let us seize this opportunity to exchange ideas openly, identify actionable reforms, build trusted partnerships, and move decisively from discussion to delivery.

The World Bank Group stands ready to support Romania's next phase of growth to secure its place among the world's most advanced economies.