Romania’s economy is expected to grow by less than 0.5% in 2026, according to a report announced by CFA Society Romania on October 6 ahead of its official release one day later. The association of financial analysts said that accessing European Union funds would be essential for restoring economic momentum in 2027.
CFA Romania’s members anticipate that domestic challenges will continue to weigh on growth, including unpredictable fiscal policy, the need for further fiscal consolidation, weakening real wages amid high inflation, and slowing expansion in key sectors such as construction and information technology.
“Fiscal policy will continue to tighten through tax increases and financial repression, with negative effects on demand. Interest rates will remain at high levels, amid persistent and high inflation,” the report stated, as reported by Ziarul Financiar.
The Romanian government has repeatedly denied plans for new tax hikes beyond those already scheduled for January 2026. These include an increase in the dividend tax rate and the introduction of a levy targeting multinational corporations’ intra-group expenditures in several key categories, which would become non-deductible for tax purposes.
Analysts warned that the combination of fiscal tightening and high borrowing costs could further suppress investment and consumer demand next year. The report noted that the government’s fiscal stance, while necessary to stabilise public finances, risks prolonging the slowdown that began in late 2024.
While CFA Romania referred to “financial repression” in its press release, the report is expected to clarify whether the term was used in its technical sense, referring to policies that keep interest rates artificially low to reduce debt servicing costs. If applied, such measures could support debt sustainability but might also distort financial markets.
iulian@romania-insider.com
(Photo source: Oleg Kachura/Dreamstime.com)
Leave a Reply