Erste sees better economic sentiment in Q3 but keeps Romania’s negative 2026 GDP growth forecast

The analysts pointed to some improvement in growth momentum on a quarter-on-quarter basis in the third quarter, which “supports our view that economic activity is likely to be stronger in H2 than in H1”.

“We continue to expect a recession in 2026, with GDP contracting by 0.7%, while growth is projected to move closer to potential in 2027, with GDP expanding by 2.2%,” the note said.

Romania’s ESI, although improving in Q3, remains well below the 100-point long-term average.

The manufacturing confidence balance deteriorated to -3.0 in September from -2.6 in August, as more pessimistic production expectations more than offset lower inventories, while order-book assessments remained unchanged.

The services sentiment balance fell to -3.0 from -1.9. Managers reported a weaker assessment of the recent business situation, marginally better past demand but significantly worse expectations for future demand.

The consumer confidence balance edged up to -32.5 from -32.6. Consumers reported better past and expected financial situations, as well as a better assessment of the general economic situation. However, their intentions to make major purchases over the next 12 months weakened.

The retail trade sentiment balance strengthened to 2.7 from 0.6. Managers reported stronger recent business activity and lower inventories, but more pessimistic expectations for future sales.

The construction confidence balance improved to -9.6 from -10.5, with stable order-book assessments and better employment expectations. Selling-price expectations increased slightly in manufacturing but declined in services, retail and construction. Consumer inflation expectations also edged lower during the month.

The Employment Expectations Indicator (EEI) fell to 99.9 in September from 100.8 in August, moving marginally below the 100-point threshold and pointing to hiring intentions slightly below their historical average. Managers in manufacturing and services reported weaker employment expectations, while retail and construction companies reported stronger hiring intentions. Consumers’ fears of unemployment over the next 12 months increased from August.