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OECD: Romania must boost productivity, human capital to foster economic growth

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The Organisation for Economic Co-operation and Development (OECD) said on Friday that boosting productivity and human capital in Romania will foster economic growth, more jobs and higher income in the country, according to See News.

„Accelerating the pace of structural reform, investing EU funds effectively while ensuring good fiscal management will help strengthen the recovery and future growth, which will lead to better opportunities for people in Romania to get ahead,” the OECD said in an economic survey of the country.

The OECD Secretary-General Mathias Cormann had a meeting with Romanian Prime Minister Nicolae Ciuca on Friday in Bucharest and attended the launch event of the „Economic Survey of Romania” at the Victoria Governmental Palace.

„The immediate priority is to make more progress on the vaccination campaign. Strengthening productivity by reducing competition barriers, improving the regulatory framework, and enhancing the size and quality of the workforce will then be key to further increase living standards and facilitate convergence towards OECD income levels,” stated Cormann.

OECD explained that Romania made strong progress in raising living standards prior to the Covid-19 crisis and the resilience of its economy during the pandemic has been impressive. Now, the immediate economic as well as public health policy priority is to massively expand full vaccination coverage, which is at about 40% and is among the lowest in Europe.

„Romania needs to put in place a credible medium-term consolidation plan in order to ensure a gradual reduction of the budget deficit. This plan should include reforms to accelerate the absorption of the NextGeneration EU funds, improve the efficiency of public spending and increase the financial sustainability of the pension system in the face of an ageing population,” the OECD added.

Investing in the green and digital transitions would also raise Romania’s growth potential while helping to move closer to its climate targets, the survey showed.

„Deploying more active labour market policies and improving access to quality vocational and adult education would help address a mismatch in the labour market. Improving skills and job opportunities would also help to slow the flow of Romanian emigrants, which has already hampered economic development through labour and skill shortages,” the OECD concluded.

On Tuesday, OECD’s Council announced that it has decided to open accession discussions with six candidates for membership, including Romania, Bulgaria and Croatia.