Romania’s economy in recession
Romania's economy has officially entered a technical recession, after two consecutive quarters of declining Gross Domestic Product.
Sorin Iordan, 14.05.2026, 14:00
Romania’s economy shrank by 0.2% in the first three months of this year compared to the previous quarter and by 1.5% compared to the first quarter of 2025, the National Institute of Statistics (INS) announced on Wednesday. The Gross Domestic Product grew by 0.7% in real terms last year compared to 2024, but in the last three months of 2025 it was 1.8% lower compared to the previous quarter. Thus, after GDP decreases of 1.8% and 0.2%, respectively, recorded in two consecutive quarters, the country entered a technical recession. At the European level, only Romania and Ireland recorded a decline in the economy, given that Gross Domestic Product grew by 0.8% in the euro area and by 1% in the European Union in the first quarter of 2026, compared to the same period in 2025.
And the bad news doesn’t stop there, with the INS announcing that the annual inflation rate in Romania exceeded 10.7% in April, up from 9.87 % in March. By way of comparison, the average value of this indicator in the European Union states is approximately 3%. In the last year, in Romania, services and non-food goods have become the most expensive, with significant increases in electricity, over 50%, rents almost 44% or diesel about 33%. Price decreases compared to April 2025 were recorded for some foods, such as potatoes, beans, flour and cornmeal, but price increases in coffee, eggs, beef or fresh fruit led to an average increase in the price of foods by over 7%.
In a statement to Radio Romania, the president of CFA Romania, Adrian Codirlaşu, said that inflation was fueled by the high budget deficit, which led to high interest rates and tax increases, which affected consumption and investment. According to him, another cause was the conflict in the Middle East, which boosted general price increases influenced by oil and gas tariffs. The worrying statistics come in a context in which Romania’s economy is not performing. According to Eurostat, the country is also among the EU states that have recorded the most severe decline in industrial production and the largest drop in service production.
The National Strategy and Forecast Commission in Bucharest estimated, last fall, an economic growth of 1% in 2026, the European Commission predicted an advance of Romania’s GDP of 1.1%, and the World Bank and the International Monetary Fund, an increase of 0.5% and 0.7%, respectively. Also, in February, the National Bank of Romania revised upwards, from 3.7% to 3.9%, the inflation forecast for the end of this year and predicted that it would reach 2.7% by the end of 2027. In fact, the central bank will have a monetary policy meeting on Friday, where it is expected to maintain the reference interest rate at 6.5% and keep this level until the end of the year, due to the recent depreciation of the national currency, the leu, and the inflationary trajectory. (LS)
