Romania's economy is expected to record zero growth in 2026 before gradually recovering over the following two years, according to the latest Global Economic Prospects report published by the World Bank on June 11. Romania recorded economic growth of under 1% per year in 2024-2025 while its GDP shrank by 1.2% y/y in Q1 this year.

The World Bank forecasted Romania's GDP to stagnate this year, a sharp downgrade from the 1.3% growth projected in January. Economic activity is then expected to expand by 1.7% in 2027, compared with previous forecasts of 1.9% and 2.0% in 2028.

The revision follows a series of downward adjustments by international institutions and Romanian authorities. The government's forecasting commission CNP reduced its own estimate for 2026 growth to 0.1%, from 1.0% projected in December. The CNP, however, expects a stronger recovery of over 2% per annum in the coming years.

The WB report attributed the weaker outlook across Europe and Central Asia to higher energy prices and increased geopolitical uncertainty, which have weighed on household consumption. In Romania's case, the effects are compounded by fiscal consolidation efforts, limiting the government's ability to support economic activity through higher spending.

Compared with its January projections, the World Bank implemented some of the largest downward revisions in the region for Romania, Türkiye, Moldova, and Ukraine. The changes reflect both the commodity price shock and country-specific developments.

The institution's baseline scenario assumes that the most severe phase of disruptions to global commodity trade will end in July, with shipping volumes through the Strait of Hormuz recovering during the second half of the year. This would allow energy supplies to gradually return close to pre-conflict levels.

"Higher oil prices, with elevated trade and geopolitical uncertainty, have led to downward revisions to 2026 growth projections since January for most commodity importers, outweighing limited upward revisions for commodity exporters," the report said.

The World Bank's latest assessment is broadly in line with recent forecasts from other international organisations. The European Bank for Reconstruction and Development revised Romania's 2026 growth outlook to a 0.2% contraction, while analysts increasingly expect weak domestic demand and fiscal tightening to weigh on the economy throughout the year. More pessimistic scenarios envisage economic contraction.

iulian@romania-insider.com

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