How is Romania performing in terms of poverty reduction through social transfers?

In Romania, the impact of social transfers on reducing poverty is smaller compared to other countries, according to Eurostat statistics.

Social transfers are government measures through which resources are redistributed to the population in the form of money or services (such as pensions, child allowances, unemployment benefits, and aid for vulnerable people), without any direct consideration from the beneficiaries. They are intended to reduce inequalities and the risk of poverty, contributing to an increase in households’ disposable income.

Thus, the share of the population living in poverty before social transfers in Romania in 2024 was 23.4%, below the European Union average (24.6%). Romania ranks 19th out of the 27 member states. The highest rates of poverty before social transfers are recorded in Bulgaria (30%), Estonia (29.5%), and Lithuania (29%), while the lowest are in the Czech Republic (16%), Hungary (18.7%), and the Netherlands (20.5%).

At the same time, the monetary poverty rate after social transfers (excluding pensions) is 19%, which places Romania 8th in the European Union. The highest poverty rates after social transfers are recorded in Bulgaria (21.7%), Latvia (21.6%), and Lithuania (21.5%), while the lowest are in the Czech Republic (9.5%), Belgium (11.4%), and Denmark (11.6%).

Romania has one of the lowest reductions in poverty in percentage points after social transfers (4.4 pp), alongside Hungary (4.4 pp) and Greece (3.9 pp). The countries with the greatest impact of social transfers on poverty reduction are Ireland (13.1 pp), Belgium (12.9 pp), and Denmark (11.8 pp). Thus, the impact of social transfers on poverty reduction is extremely low, despite the fact that Romania has high poverty rates. Partial data for 2025 do not show a substantial change.

In fact, in 2023, the last year for which data is available, social protection spending in Romania amounted to 12.8% of GDP (of which 8.3% of GDP is accounted for by pensions), ranking fourth in the European Union after Ireland (8.1%), Malta (9.7%), and Hungary (10.7%). The highest social protection expenditures as a percentage of GDP are in Finland (25.6%), France (23.3%), Austria (21.2%), and Italy (21%).

Social protection expenditures include: pensions paid from the public system, unemployment benefits, child and family allowances, disability benefits, housing support, programs to combat social exclusion (including social assistance benefits), and administrative costs related to social protection. Therefore, the idea that the Romanian state spends too much on social protection is more of a myth, as the share of social protection spending is low relative to needs (high proportion of the poor and high proportion of the elderly) and compared to other European Union member states.

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Data source:

• Eurostat - At-risk-of-poverty rate before social transfers (pensions excluded from social transfers) https://ec.europa.eu/eurostat/databrowser/view/ilc_li10/default/table?lang=en
• Eurostat - At-risk-of-poverty rate after social transfers (pensions excluded from social transfers) https://ec.europa.eu/eurostat/databrowser/view/sdg_01_20/default/table
• Eurostat - General government expenditure by function https://ec.europa.eu/eurostat/databrowser/view/gov_10a_exp__custom_20658014/default/table

Data processing and text design: Sebastian Țoc

Infographic: Pascalone Media SRL