EBRD cuts forecast for Romania’s economy to 1.2% growth this year, followed by 2.2% in 2027

The European Bank for Reconstruction and Development (EBRD) has reduced the forecast for the Romanian economy in 2026 to 1.2% growth, compared to 1.6% envisaged in September, under the Regional Economic Prospects report published on February 26. The country’s economy would accelerate to 2.2% in 2027, according to the bank’s scenario.

The gloomy 2026-2027 forecast for Romania came amid a 0.2 percentage-point upward revision by the EBRD to the overall forecast for the economies it operates in, to 3.6% in 2026 and accelerating to 3.7% in 2027.

The gradual acceleration from a modest growth in 2025 (estimated by the EBRD at 0.9%, but probably smaller if the 0.6% flash estimate is confirmed) is supported by a projected peak in the absorption of European funds from the Recovery and Resilience Facility (RRF) and an improvement in the trade balance, according to the EBRD. Weak external demand is a significant source of downside risk, the bank warned.

Fiscal consolidation and the restrictive monetary policy aimed at addressing the inflation peak are two sources of growth moderation mentioned by the EBRD.

The fiscal deficit is estimated to have narrowed from 9.3% of GDP to around 8% in 2025 and is expected to decrease to 6.2 of GDP in 2026.

The VAT increase and energy prices pushed annual inflation to a year-end peak of 9.7%, the highest in the EU. The National Bank of Romania maintained its restrictive policy rate to combat persistent inflationary pressures.

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