“Even if the annual growth rate in the first quarter was slightly revised to the upside by 0.1% at 0.3% in the first quarter of 2025, it still falls short of our initial expectation. Because of this and also accounting for high frequency data signals for the second quarter we revise our full year GDP growth forecast for this year at 1.3% from 1.8%,” Erste said in a report.
The group’s analysts say that due to the much-anticipated fiscal consolidation measures, which will likely be implemented later this year, consumption is expected to further decelerate in 2025. Investments will be a key driver for this year’s growth story and will be very important to follow the EU fund absorption.
At the same time, the strong negative effect from net exports should be less severe this year, either because of improved external demand or base effects combined with weaker domestic consumption.
There are also expectations for a better agricultural year, which might boost the economic growth; the effects of this will only be seen in the third quarter.
The Austrian group keeps its GDP growth forecast for 2026 at +3.1% for now, but sees risks to the downside for this figure, as well.
Romania’s economy stagnated in the first quarter of 2025 compared with the previous quarter and only grew by 0.3% year-on-year. On the demand side, consumption remains the main growth driver. Investments had an underwhelming but positive contribution while inventories added 1%.
“But almost all of the growth was offset by net exports. On the supply side, the structure remains weak, with a negative contribution from industry, a shy positive contribution from construction and some relief coming from net taxes. The other components had a close to zero contribution,” Erste adds in its report.
(English version by Loredana Fratila-Cristescu)