European Commission cuts Romania’s 2025 economic growth forecast to 1.4%

The European Commission has revised down its economic forecast for Romania, predicting a modest GDP growth of just 1.4% in 2025 - below the 2.5% projected in its previous autumn outlook. The updated Spring Forecast also anticipates a slight recovery to 2.2% in 2026, but warns that economic momentum could be constrained by rising uncertainty and internal vulnerabilities.

The budget deficit is expected to remain high, at 8.6% of GDP in 2025, with only a marginal improvement to 8.4% in 2026. According to the Commission, the general government deficit was 9.3% of GDP in 2024, “fuelled by very large increases in public wages and pensions.”

“After a lacklustre 2024, Romania’s economy was on course to pick up speed at the start of 2025, due, in particular, to construction, agriculture and services, and better export prospects. However, the uncertainties generated by the imposition of US tariffs, and also by heightened domestic political and fiscal volatility are expected to dampen exports, economic sentiment, and ultimately investment and consumption,” the EC said.

Although inflation is projected to decline, it will remain elevated, adding to the country’s economic challenges. Overall, average HICP inflation is projected to decline marginally to around 5% in 2025 and follow a more pronounced downward trend to below 4% in 2026.

Also, government debt is forecasted to increase from 48.9% of GDP in 2023 to about 63% of GDP in 2026, “mostly driven by high government deficits and a projected increase in interest payments,” according to the EC report.

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