McKinsey & Company: Romania’s digital economy could grow 3.5 times to 52 billion euros in 2030 (1)

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Romania’s digital economy could grow 3.5 times to around 52 billion euros in 2030 compared to 14.8 billion euros last year, ICT and digital commerce being the main growth drivers, according to the new McKinsey&Company report titled Digital Challengers on the Next Frontier. Thus, Romania’s digital economy may account for almost 9.6 % of the GDP in 2030, compared to around 6% of GDP in 2021.
The report is the third edition in a series on the digital economy, following The Rise of Digital Challengers in 2018 and Digital Challengers in the Next Normal in 2020, comparing the potential of Digital Challengers (Bulgaria, Croatia, Czechia, Hungary, Latvia, Lithuania, Poland, Romania, Slovakia, and Slovenia) with two other clusters in Europe: Digital Frontrunners (Belgium, Denmark, Estonia, Finland, Ireland, Luxembourg, the Netherlands, Norway, and Sweden) and Big 5 European economies (France, Germany, Italy, Spain, and the United Kingdom).

Romania – the third-largest digital economy in CEE and the second-largest digital commerce market

The report analyzes the opportunities presented by the digital economy in ten economies of Central and Eastern Europe – small and medium-sized countries with strong potential for fast digitization. The three main components of the digital economy considered in the report are: digital commerce (online retail spendings on goods&services), ICT (the value of spends of governments and companies across all sectors on hardware, software, infrastructure, and related services) and offline spend on digital equipment (e.g., PC, smartphones, IT infrastructure, Cloud, etc.).

The digital economy of these ten countries in CEE is estimated at 124 billion euros in 2021, with digital commerce representing 68 billion euros, ICT – 49 billion euros and offline spend ondigital – 8 billion euros. The digital economy of these ten countries in CEE could reach €330 billion in 2030 as digital commerce, the main driver of growth to date, will continue to develop, while new business building and public sector digitization can accelerate Information and Communication Technologies (ICT) growth.
Romania’s digital economy was estimated at 14.8 billion Euros in 2021 – around 6% of GDP, according to McKinsey research, If it reaches the estimated value of 52 billion euros by 2030 – Romania’s digital economy could account for almost 9.6 % of the GDP in 2030.
Currently, Romania is the third-largest digital economy in the Digital Challengers cluster after Poland (44 billion euros) and Czechia (18 billion euros). The value is shared between digital commerce (9.8 billion euros), expenditures on ICT (3.5 billion euros) and the 1.6 billion euros offline spending on digital products (e.g., PC, smartphones, IT infrastructure, cloud).

Digital commerce represents 66% of Romania’s digital economy. ICT may be the main growth driver by 2030

In Romania, ICT grew at around 8% annually in 2017-2021 to 3.5 billion euros. However, investments in this sector are still low compared to countries such as Poland (14 billion euros), Czechia (9 billion euros), or Lithuania (7 billion euros). Romania is showing signs of a developing ICT infrastructure, which may lead to higher digital literacy among the population. As a result, ICT may be the main growth driver of the digital economy until 2030.
Thus, digital commerce represents around 66% of the entire digital economy – this segment grew by 17% annually, almost doubling from EUR 5.2 billion in 2017 to EUR 9.8 billion in 2021. The widespread growth can be seen considering the share of SMEs selling online, for instance, which more than doubled from 7 percent in 2017 to 17 percent in 2021.
Romania is the second largest digital commerce market in CEE, after Poland (26.7 billion euros) and before Czechia (9.1 billion euros).
However, the average expenditure on digital commerce per capita and the digital commerce penetration rate are some of the lowest in the region.
Romania’s digital commerce per capita was around 506 euros in 2021 – while the Digital Challengers’ average was 673. The highest levels of digital commerce per capita are in Lithuania (1,064 euros in 2021), followed by Slovenia (866 euros) and Czechia (849 euros)
In Romania, digital represents just 14% of the total retail segment (68.9 billion euros), the rest being represented by offline commerce (59.1 billion euros). With 14% penetration, Romania has one of the lowest rates of digital commerce in total retail in CEE, the average for Digital Challengers being 16%.

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