Romania’s seasonally adjusted GDP remained constant in the second quarter of 2026, compared to Q1, and was 2% y/y lower than in the same period of 2025, according to flash estimate data published by the statistics office INS. After the marginal 0.1% q/q contraction in Q1, Romania’s economic activity remained for the third consecutive quarter roughly at the same level – which is the same level as that of Q2 2024. 

The country’s GDP in the whole first half of the year (H1) contracted by 1.6% y/y.

Under the national methodology (that uses the previous year period’s prices for GDP aggregation, as opposed to the whole year’s average prices used by Eurostat), Romania’s GDP decreased by only 0.4% y/y in Q2, after the 1.2% y/y decline in Q1 – resulting in a milder 0.8% y/y annual economic contraction for the whole H1 period.

Given the base effects generated by the higher GDP in the first three quarters of 2025, Romania will end 2026 with a significant negative performance (-1.3% assuming seasonally-adjusted GDP remains constant and there is no backward adjustment of data as of now).

Romania’s authorities imply the economic contraction was expected and needed as an intermediary stage before a more sustainable growth model.

Romania undergoes a deep fiscal consolidation process with the Resilience Facility money and cohesion funds from the European Union offsetting the scaling down of the fiscal stimulus. From a record 9.3% of GDP in 2024, Romania’s general government budget may end this year around 6% of GDP. Private consumption, mainly hit by the consolidation, lost its role as a key economic driver – which is good for overall sustainability – resulting in a negative correction of the country’s GDP.

On a moderately optimistic note, the Ministry of Finance believes that the Q2 flash data signals the beginning of a process of economic stabilisation, during which investments and net exports take on a more important role, while consumption moderates. 

“The stakes of this period are the shift towards a growth model based more on investment, productivity and external competitiveness and less on consumption expansion supported by the accumulation of fiscal and external deficits,” the finance minister commented.

"Sustainable economic growth cannot be built on stimulating consumption through ever-increasing public deficits, but on investments, productivity, competitiveness and a stable fiscal framework, capable of supporting development without the accumulation of new imbalances," finance minister Alexandru Nazare emphasised.

Independent analysts expect economic recovery no sooner than 2027.

Analysts expect possibly another quarter of annual economic contraction in Q3, but potentially a positive impact from agriculture and eventually a mild economic contraction for the entire year. This would not be very bad news, given the circumstances, Raiffeisen Romania’s chief economist, Ionut Dumitru, noted, as cited by Ziarul Financiar.

Both Dumitru and ASF Romania’s president Adrian Codirlasu ruled out positive economic growth for the entire year. Codirlasu even floated the idea of another (q/q) economic contraction in Q3, driven by the problems on the electricity market.

Erste Group continues to expect a mild 0.3% recession in 2026, following the Q2 flash release, assuming Q2 quarterly growth will be revised slightly higher in future releases. However, should the flash estimate be confirmed in the detailed breakdown, Erste analysts said that they could revise their full-year forecast down by around 0.1-0.2pp.

Erste Group expects Romania’s economy to rebound towards its potential growth rate in 2027, with GDP growth reaching 2.5%.

iulian@romania-insider.com

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