RoEM Analysis: Romania’s GDP to advance by only 1.5% in 2025, with uncertainties stemming from domestic and regional economic and political risks

• In the absence of current negative influences, Romania’s economy could have an annual growth potential of 3-4%.
• Political instability and global geopolitical risks are dampening growth.
• Economic growth in 2024 was driven by wage increases and accelerating consumption, satisfied however largely through imports.
• Due to a decline in domestic economic competitiveness, net exports contributed negatively to GDP.
• European Union funds could provide a much-needed boost to GDP growth in 2025.
• Romania’s accession to the Schengen Area could increase economic growth.

Romania’s Gross Domestic Product (GDP) is expected to register modest growth of 1.5% in 2025, compared to 0.9% in 2024, but still well below the economy’s potential, which would be closer to an annual growth rate of 3-4% in the long run, according to analysts from the Romanian Economic Monitor (RoEM), a research project of the Faculty of Economics and Business Administration (FSEGA) of the Babeș-Bolyai University (UBB) in Cluj-Napoca. However, growth could be jeopardized by several internal factors—including the need for strict government budget deficit management and political instability (even after the Constitutional Court’s decision on March 11)—as well as external risks, such as global geopolitical tensions and the slow recovery of the Eurozone economy.