UniCredit projects 1.8% growth for Romania this year, still driven by private consumption

Romania’s economy will accelerate to a 1.8% growth rate in 2025 and 2.5% in 2026, according to the forecast issued by UniCredit for the region. The strongest growth rate this year is expected in Serbia (over 4% y/y), with Slovakia (+1.6%) marking the weakest performance.

Wages will continue to grow in the region, outpacing inflation and favoring private consumption as a key growth driver, according to UniCredit estimates.

Romania’s growth rate, among the lowest in the region, will still be driven by private consumption, while public consumption will indeed reduce its contribution in line with the fiscal consolidation.

The fixed investments will contribute 1pp to Romania’s overall growth rate, half the 2pp contribution of private consumption, according to the bank’s projections. The strong domestic demand for consumption and investment will further put pressure on the country’s (negative) net exports in both 2025 and 2026.

Public investment will have a greater contribution to economic growth in 2025, especially thanks to European funds and the PNRR. UniCredit estimates that Romania will manage to take EUR 4.2 billion, or 1.1% of GDP, from the PNRR compared to 0% in 2024.

UniCredit believes that the Romanian currency leu is overvalued, and analysts expect the exchange rate to increase from 4.97 RON/EUR to 5.07 in 2025 and 5.15 in 2026.

The main problem in Romania is related to reducing the budget deficit, with UniCredit analysts believing that the austerity package approved at the end of last year will not be sufficient to reduce the budget deficit from 8.6% to 7%, which means that an increase in taxes and fees seems inevitable to reach this deficit target.

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