Romania’s economy is expected to post the weakest economic growth among the World Bank’s Europe and Central Asia universe, only 0.4% – half of Russia’s 0.9% advance and far from Ukraine’s 2.0% advance, to name two countries currently in war. The recovery will not be robust, with growth rates of 1.3% in 2026 (again the weakest in ECA) and 1.9% in 2026 (second only to Azerbaijan), according to the WB’s ‘Jobs and Prosperity’ report published on October 7.
WB operated the sharpest cut in its forecast for Romania, compared to the past estimates in June. It revised its forecast for Romania’s economic growth by 0.9 percentage points (pp) for this year, and by 0.6pp for 2026 and 2027.
The economy of the entire ECA region is expected to increase by 2.4% this year (+3.3% without Russia), at the same rate in 2026, and by 2.6% in 2027.
Romania’s consumption growth is projected to slow to about 1.1% this year, from 5% on average during 2000–2024, as fiscal consolidation weighs on spending and inflation remains elevated, according to the WB, which explains the main driver behind Romania’s economic slowdown.
Romania, with a fiscal deficit exceeding 9% of GDP last year, has introduced a fiscal consolidation package combining spending measures, such as public wage and pension freezes, with higher taxes, the WB also says, naming another cause of the economic slowdown.
The fiscal deficit in Romania is expected to decline to below 6% of GDP by 2026, according to the WB.
iulian@romania-insider.com
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