Report on Inflation
The National Bank of Romania has revised its year-end inflation forecast upward to 5.5%
Ştefan Stoica, 20.05.2026, 14:00
The National Institute of Statistics has recently announced that inflation in April rose to 10.7%, driven mainly by fuel prices. On Tuesday, the Governor of the National Bank of Romania, Mugur Isărescu, confirmed that inflation will reach double digits this summer, with the possibility that it could rise to 11% in July. It will not begin to decline until late autumn, with the prospect of reaching 5.5% by year-end, which still represents an upward revision from the previous forecast of 3.9%. However, the Central Bank has maintained its inflation forecast for next year at 2.7%. Estimates can change rapidly, depending on external developments and the domestic political situation, Mugur Isărescu warned.
The focus is on the conflict in the Middle East and the risks associated with the Strait of Hormuz, as well as domestic negotiations to form a new government. Current forecasts are based on several key conditions, including the existence of a stable government in Bucharest. The NBR governor also said that financial markets are closely monitoring both economic measures and messages from the political arena. Under these circumstances, continued fiscal consolidation remains essential for maintaining the trust of both investors and rating agencies.
Regarding the exchange rate of the national currency, the leu, Mugur Isărescu has stated that the National Bank of Romania has intervened in the foreign exchange market much less frequently recently than it did in April and May of last year, and that the current level, relative to the euro, appears to be one of equilibrium. In the opinion of the Central Bank Governor, a possible prolongation of political negotiations could create additional difficulties during an already complicated period for the economy. Mugur Isărescu is not convinced that the solution of a technocrat prime minister, touted as a likely scenario in political circles, is the most appropriate one, and he vividly recalled his own experience from 1999.
Mugur Isărescu: “I don’t know how easy it would be for a technocrat, especially one coming from outside, to quickly tackle all the issues at hand and, above all, to influence all the members of the government, right? You have to have a certain level of credibility; you have to know them, and they have to know you. Otherwise, you’re just talking into the void. As prime minister, you need to have eyes—not just in front of you, but to the left, to the right, and especially in the back—to see who’s stabbing you in the back or at least to be able to dodge it. It’s much harder to be prime minister. It’s an extremely demanding job.”
The Central Bank views investment, particularly that supported by European funds, as the main driver for sustaining economic growth and mitigating the negative effects of declining consumption. Mugur Isărescu has explained that external financing flows also depend on political stability and the credibility of economic policies. He hopes that the upward trend in investment seen in the last two quarters of last year will continue into the first quarter of this year. Romania, according to the NBR, is going through a sensitive period in which economic balances depend not only on external developments, such as the conflict in the Middle East, but also on the authorities’ ability to ensure political stability, fiscal discipline, and continuity in attracting investment.
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