Romania’s statistics office confirmed the 1.6% GDP growth (+1.2% y/y under the chain-linked volume or CLV methodology used by Eurostat) for the third quarter of the year (Q3), half of which was the result of outstanding activity reported in construction. The positive base effects in agriculture (weak crops last year) and marginal improvement in industry also contributed.

Detailed Q3 GDP data revealed several positive developments: a modest recovery in domestic demand for both consumption and investments after two difficult quarters marked by uncertainty, the share of the domestic demand covered as net imports of goods and services was the lowest since 2020, and the industry marked one of the rare positive contributions on the GDP production side.

For the entire January-September period, Romania’s GDP increased by 0.8% y/y, or by 1.5% y/y in CLV terms – more relevant for the full-year performance projections. Assuming 2% q/q economic contraction in Q4 (the decline was 0.2% q/q in Q3), full-year GDP would remain at 1% – a modest performance not far from last year’s 0.9% advance – one of the weakest performances in the region, unlikely to dramatically improve in 2026.

In absolute terms, Romania’s GDP increased by 9.2% y/y to RON 516 billion (EUR 101 billion) amid a 7.5% y/y deflator, which brought the 4-quarter rolling GDP to RON 1.86 trillion (EUR 371 billion). Sustained levels of the GDP deflator reflecting industrial and consumer price inflation rates continued to erode the government’s indebtedness, with the public debt-to-GDP ratio being revised to 58.3% at the end of September, from 59.7% initially announced by the Finance Ministry this month.

The sources of the 1.6% GDP growth in Q3 were multiple, but the sector of construction contributed the most: 0.8 percentage points, due to 12.1% y/y stronger value added generated. 

The sector of agriculture boasted 9.2% y/y growth after the outstanding 14.7% y/y contraction in the same period of 2024 (base effects), contributing nearly 0.6 pp to the overall GDP growth. Industry has surprisingly posted positive annual performance (+1.1% y/y), resulting in a marginal 0.2 pp contribution – significant for the overall performance only under these low-growth circumstances.

Regarding the domestic demand, it posted the strongest annual growth in Q3 (1.4% y/y), recovering gradually after the -2.1% y/y contraction – the widest decline since the coronavirus crisis in 2020. Notably, the demand for gross fixed capital formation (investments) advanced by 3.2% y/y and contributed nearly 1 percentage point to the +1.4% y/y advance of the domestic demand, marking a notable recovery after the slowdown that resulted in negative annual performances in Q1 and Q2. 

The demand for consumption also strengthened in Q3 (+0.8% y/y), after a transitory contraction (-0.6% y/y) in Q1  and a modest advance (+0.2% y/y) in Q2. It contributed nearly 0.6 pp to the 1.4% y/y increase in the domestic demand.

In another positive development, Romania’s net imports of goods and services reached the lowest level as a percentage of domestic demand, namely 3.7% in Q3 from 5.8% in Q2 and more than 6% in the previous two quarters.

iulian@romania-insider.com

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