Purchasing power in Romania over that in Hungary, on par with Poland
<p>Romania’s GDP per capita in PPS (Purchasing Power Standard) is similar to that of Poland, and over the one in Hungary. A similar situation can be observed in terms of wages, <a href="https://www.profit.ro/stiri/economie/grafic-romania-a-depasit-ungaria-la-salarii-si-a-egalat-polonia-pe-care-a-ajuns-o-si-la-pib-per-capita-21862702?utm_source=Rss&amp;utm_medium=Referral&amp;utm_campaign=Cross">Profit.ro</a> reported.</p>
<p>GDP per capita at Purchasing Power Standards (PPS) is helpful to evaluate how the population's average income impacts daily living. This metric balances the economic shifts in other countries that have also undergone post-pandemic changes. </p>
<p>Romania's salary growth aligns with the relative European situation on the GDP per capita PPS indicator. At 80% of the EU-27 average, Romania is on par with Poland and ahead of Hungary, Greece, Croatia, Slovakia, and Bulgaria. </p>
<p>PPS is an artificial monetary unit. Theoretically, one PPS can buy the same amount of goods and services in any country. However, price differences between countries mean a different number of national currency units is required for the same goods and services, depending on the country. PPS is derived by dividing any economic aggregate of a country, expressed in its national currency, by the corresponding purchasing power parity (PPP). </p>
<p>In Romania, the adjusted annual average salary in 2023 was EUR 17,739, exceeding the wages in Hungary (EUR 16,895) and Greece (EUR 17,013) and approaching that of Poland (EUR 18,054), according to Eurostat. The adjusted annual average salary for full-time employees in the European Union was EUR 37,900, up by 6.5% from EUR 35,600 in 2022. For Romania, this translates to an average salary of RON 7,310 per month, roughly equivalent to the gross average monthly earnings for 2023. </p>
<p>Salaries have risen rapidly in recent years due to social policy decisions made by the government, driven by inflation caused by high costs from measures taken during the pandemic. High inflation has led to a sharp increase in nominal GDP per capita over the past five years, averaging around 11% annually, according to data from the National Institute of Statistics. </p>
<p><em><a href="mailto:radu@romania-insider.com">radu@romania-insider.com</a></em></p>
<p><em>(Photo source: designer491 | <a href="https://www.dreamstime.com/">Dreamstime.com</a>)</em></p>