Romania 2025 Economy: Slowing Growth, High Inflation, Record Deficit – What Lies Ahead?
- Jun 27
- 2 min read
Romania’s economy faces significant headwinds in 2025: slower growth, persistent inflation, and a record budget deficit. The macroeconomic developments in early 2025 have focused policymakers, financial institutions, and investors—within an increasingly tense regional context.
1. Macroeconomic Overview
Growth forecasts for 2025 have been downgraded: World Bank sees only 1.3% GDP increase, others (Erste, ING, OECD) predict 1.2%–1.5% .
In 2024, growth slowed to 0.9%, hampered by weak private investment and trade imbalances.
Inflation climbed to 5.45% in May 2025, with projections reaching 6% by year-end .
The central bank held policy rates at 6.50%, with potential cuts later in the year amid weak growth .
2. Deficit and Fiscal Pressure
Romania posted a deficit of 9.3% of GDP in 2024, the highest in the EU; projected at 8.6%/8.4% for 2025/2026 .
The European Commission triggered an excessive deficit procedure—potentially freezing EU funds .
President Nicușor Dan demands a credible fiscal plan by June 30 to prevent a credit rating downgrade .
Analysts stress that only a mix of spending cuts and tax increases will curb the deficit—yet tax hikes may prove unpopular .
3. Interesting Facts
Food inflation surged: fruit prices up 6.5%, potatoes rising almost 10% .
Public sector wage freeze slowed labor cost growth .
Agriculture and construction industries are supporting a slight recovery in 2025 .
Euro adoption remains on the agenda: ERM II by 2026, euro by 2029–2030 .
EU-funded investments under NextGen and RRF are key growth anchors .
4. Opinions & Insights
Romanian economists see euro adoption as a stabilizing factor for inflation in the long term, though short-term fiscal pressures remain .
Government officials note that without strong leadership and reforms, EU funding may be jeopardized .
ING analyst Valentin Tătaru warns deregulating energy prices and fiscal consolidation could push inflation above 6% .
International investors recommend caution: currency hedging and close monitoring of fiscal and monetary policy decisions.
Conclusion
Romania in 2025 faces a combination of stagnant growth, persistent inflation, and fiscal strain amid the path to euro adoption.
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