Economic news from Romania
The Leu strengthens against the Euro, the stock market index rises, and the budget deficit narrows
Ştefan Stoica, 20.10.2026, 14:00
The prospect of a fully empowered government taking office, after five and a half months of the Bolojan administration serving in a caretaker capacity, has had a noticeable impact on both the foreign exchange market and the stock exchange.
On Monday, the national currency strengthened against the Euro, which was set by the National Bank of Romania at around 5.33 lei, almost one ban lower than the previous reference rate.
The Leu, however, weakened against the US Dollar, which was quoted at 4.75 lei, although analysts note that this depreciation is in line with broader international trends.
The BET index of the Bucharest Stock Exchange gained 1.2% during Monday’s trading session, reaching its highest level since the end of August.
Banking analysts say the prospect of Romania having a fully empowered government has contributed to a decline in yields on 10-year Romanian government bonds, which have fallen by 14 basis points over the past week to 6.98%.
Encouraging figures have also emerged from the country’s statistical data.
The budget deficit narrowed to 3.82% of GDP after the first nine months of the year, according to figures released by the Ministry of Finance. During the same period last year, the deficit stood at 5.35%.
The Ministry says that total state revenues exceeded 522 billion lei during the first nine months of the year, equivalent to almost €100 billion, while total expenditure surpassed 600 billion lei.
The Finance Minister, Alexandru Nazare, has warned that Romania must continue its fiscal consolidation efforts next year. His inclusion in Luca Niculescu’s cabinet is expected to provide reassurance in that regard.
So how was the deficit reduced?
According to Minister Nazare, revenues increased by 11.8%, while expenditure rose by around 5%.
He said the share of public spending in GDP fell from 29.7% to 29.2%, while personnel costs were approximately four billion lei lower than a year earlier.
Meanwhile, investment spending reached 107.8 billion lei, some 25.2 billion lei higher than during the corresponding period last year.
Around 70% of those investments have been financed through European funds, including resources made available under the National Recovery and Resilience Plan (PNRR).
The final months of the year will be crucial if Romania is to meet its budget deficit target of 6.2% of GDP. Payments linked to PNRR-funded projects are continuing, while the final stretch of the year traditionally accounts for between 15% and 20% of total annual expenditure.
Among the factors placing pressure on the budget, Minister Nazare cited the increase in public debt to more than 60% of GDP, rising healthcare expenditure, obligations related to energy price compensation schemes, and payments stemming from enforceable court rulings involving members of the judiciary.
Alexandru Nazare stressed that maintaining Romania’s sovereign credit rating is essential to supporting economic recovery. He added that international rating agencies will assess the country’s 2027 budget projections during the first months of next year. (VP)
