ING Bank, in a research update, pictures a quite optimistic macroeconomic scenario with growth rebounding to 2.3% next year from a 0.5% contraction in 2026, fiscal consolidation in line with plans this year and “reasonable chances” of close to full Resilience Facility money absorption despite implementation risks.

However, the bank’s analysts caution that the 2026 budget consolidation remains only a step in the right direction and consistent execution is still key. 

The prolonged interim government situation adds uncertainty around policy continuity, reform implementation and Recovery and Resilience Facility (RRF) milestones, while rating downgrade risks remain important as growth, fiscal and political stability remain under close scrutiny, the research update reads.

Amid a benign short-term fiscal outlook and macro rebalancing gaining traction, ING warns political uncertainty remains an important caveat. The interim government has now been in place for around three months, which raises questions around policy continuity, reform ownership and the ability to deliver politically sensitive milestones on time. 

This does not invalidate the recent fiscal improvement, but it does increase the premium on execution, especially as the final RRF deadlines approach and markets continue to assess the credibility of Romania’s consolidation path, the report reads. Rating downgrade risks remain important as growth, fiscal and political stability remain under close scrutiny.

Economic activity likely remained lacklustre in the second quarter of the year and is unlikely to brighten materially in the third quarter either, under ING’s scenario envisaging 0.5% economic contraction this year. Consumer and business confidence remain far from a full recovery, inflation is still elevated, and the fiscal impulse remains restrictive, the bank’s analysts argue.

Looking further ahead, growth should gradually recover as the country moves into 2027 and over the medium term. A key driver is the productive potential, supported mainly by the ongoing investment cycle, with infrastructure development taking center stage.

Although the RRF ends in August 2026, several projects should continue, especially in capital-intensive sectors such as health and transport, where financing is expected to shift towards Cohesion funds. In addition, under the SAFE framework, Romania is set to access a sizeable allocation of around EUR 16.7 billion, including pre-financing of roughly EUR 2.5 billion, subject to formal procedures. This should also support FDI appetite, alongside a gradual recovery in private consumption as inflation cools. Taken together, these factors should provide a firmer base for activity. It expects growth to recover to 2.3% in 2027, after this year’s projected 0.5% contraction.

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iulian@romania-insider.com