Figures released on Monday by the National Institute of Statistics in Bucharest show that Romania\u2019s economy stagnated in the second quarter compared to the first three months of the year, and compared to the same period in 2025, the GDP fell by 0.4% on a gross basis. Experts warn, however, that the economy\u2019s engine is out of balance, while investment rose sharply, consumer spending fell drastically. Trade, transportation, hotels, and restaurants made the largest negative contribution to the GDP growth, followed by manufacturing and real estate transactions, while constructions were the main driver of positive growth.<\/p>\n
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The structure of the economy remains fragile, says Flavius Jakubowicz, president of the Association of Financial and Banking Analysts of Romania: \u201cToday, Romania\u2019s economy is standing on one leg, namely, constructions and investments, which are growing by more than 15%, while household consumption is falling by more than 3%. We know that Romania\u2019s economy relies heavily on consumption, and let\u2019s not forget that industry and trade are also contracting. We couldn\u2019t necessarily say we\u2019re in a technical recession, but we\u2019re in a very, very unstable equilibrium.\u201d<\/p>\n
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An analysis by the consulting firm Frames, an economic think tank with over 20 years of experience specializing in the development of economic analyses and market studies, also points to a stagnation in economic activity in Romania during the second quarter. Experts are referring to stagflation, characterized by economic stagnation and high inflation, which continues to stifle consumer spending. The National Bank has revised its inflation forecast upward twice in a single year: from 3.9% to 5.5% and then to 6.1% for the end of 2026, with a return to the target range pushed to the last quarter of 2027, according to Frames which says that the warning in the August report is what matters most for the diagnosis: core inflation continues to rise even as the economy is contracting. This is precisely what distinguishes a typical inflationary episode from stagflation, analysts say.<\/p>\n
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Romania has gone through a year of consolidation marked by the most ambitious fiscal and budgetary adjustment in the EU, transitioning from an economy based on debt-fueled consumption to one based on investments and long-term development, says the Acting Finance Minister Alexandru Nazare. In a post on his Facebook page, he provided an up-to-date economic analysis of Romania, noting that in 2024, the country had a budget deficit of 9.3% of GDP. No other EU country entered 2025 with a deficit exceeding 6%, while the EU average was 3.1%, the finance minister noted. According to the European Commission\u2019s forecast, Romania\u2019s annual deficit fell to 7.9% of GDP in 2025 and is estimated to reach 6.2% in 2026. For the second year in a row, Romania has the largest projected deficit reduction in the EU, Alexandru Nazare also added. (LS)<\/p>\n","protected":false},"excerpt":{"rendered":"
Figures released on Monday by the National Institute of Statistics in Bucharest show that Romania\u2019s economy stagnated in the second quarter compared to the first three months of the year, and compared to the same period in 2025, the GDP fell by 0.4% on a gross basis. Experts warn, however, that the economy\u2019s engine is […]<\/p>\n","protected":false},"author":108,"featured_media":882309,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[37738],"tags":[115946,29212,158144,19347,40553],"coauthors":[113249],"class_list":["post-1057289","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-today-in-the-news","tag-bnr-2","tag-economy","tag-eu-2","tag-romania","tag-stagflation"],"acf":[],"yoast_head":"\n