Romania downgrades GDP growth projection and postpones hope for industrial recovery

Romania's state forecasting body, CNP, has revised its projection for this year's economic growth from 2.5% included in the 2025 budget planning to 1.4% under the Spring Forecast.

Even under the revised forecast, the country's economy would gain momentum compared to the slim 0.8% advance in 2024.

The economic growth is expected to strengthen to 2.4% (3.0% under the previous forecast) in 2026 and at similar rates in the following years.

Industrial production is expected to contract by 1.5% this year under the revised forecast, compared to a 0.4% y/y advance under the previous forecast issued in December. In value added terms, the industry will contract by 1.3% this year, under the revised forecast.

The sectors of agriculture and construction are expected to reverse the negative dynamics seen last year (-3.9% and -2.9% respectively), with annual growth rates of +5.0% and +3.8% (in value added terms). They will contribute 0.2 percentage points and 0.3 percentage points, respectively.

However, the strongest contribution to Romania's economic growth this year comes from the services sector (+1 percentage points), following a 1.9% year-over-year advance in the value added generated.

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