In 2026, Romania’s gross domestic product (GDP) growth is projected to pick up to 1.6% due to accelerating absorption of EU funds, but still slower than a previous forecast for 2.4% expansion, the EBRD also said in its September 2025 report. Downside risks to the forecast are linked to weaker exports and public investment cuts.
Economic growth averaged 1.4% year-on-year in the first half of 2025, amid slowing real wage growth, a deteriorating external balance and a contraction in industry. However, investment rebounded from the sharp decline experienced in last year’s fourth quarter and the agricultural sector is seen to achieve substantial recovery this year, the European lender said.
“Business sentiment has been negatively influenced by political instability in the first half of 2025 and fiscal austerity measures worth up to an estimated 5.5 per cent of GDP over two years. The fiscal deficit in the first half of 2025 (3.6 per cent of GDP) points for a full-year deficit of close to 8 per cent of GDP, down from 9.3 per cent in 2024,” according to the report.
“The energy market liberalization in July 2025 and the increase in the rates of value-added tax (VAT) and excise taxes from August 2025 are projected to contribute four percentage points to annual inflation, bringing year-end inflation to 8.8 per cent, significantly higher than the EU average, according to the National Bank,” the EBRD noted.
Romania’s annual inflation accelerated to 9.85% in August from 7.84% in July. The country’s cap scheme for electricity prices ended on June 30, after the government extended the scheme for three more months beyond its previous end-point of March 31. For natural gas prices, the scheme was extended by one more year.
In July 2025, Romania’s prime minister Ilie Bolojan unveiled a package of austerity measures aimed to narrow the budget gap, including higher VAT rates and excise duties, an increase in the number of contributors to the public healthcare system, and higher tax for banks, with many of the measures having entered into force on August 1. Other measures, such as an increase in dividend tax from 10% to 16%, are set to take effect on January 1. Last month, finance minister Alexandru Nazare unveiled a new package of fiscal measures meant to increase government revenues, including changes in the taxation of multinational companies, a new tax on extra-community parcel inflows, and an increase in the mandatory minimum social capital of limited liability companies. The government assumed responsibility in parliament for this second package on September 1.
In the EBRD’s region of Southeastern EU, which includes Romania, Bulgaria, and Greece, GDP growth is projected to slow down to 1.7% and 1.9% in 2025 and 2026, respectively, due to Romania’s fiscal consolidation coinciding with a downward phase of the business cycle. Bulgaria’s improved political stability and upcoming eurozone accession support the country’s recovery of investment and EU funds absorption, while Greece’s economic outlook remains stable due to its strong tourism season and effective use of EU funds.