Romanians are worse off now compared to 6 months ago, and 2026 will also be difficult, but from 2027 and then on, there is hope, said president Nicusor Dan during an interview with Romania TV.
The government targets a deficit of 8.4% of GDP this year, marginally below 8.65% of GDP in 2024. To tackle it, it increased the TVA, several other taxes, liberalized the energy market, and planned a reduction in public expenditure.
Overall, the measures were a success, and thanks to them, Romania avoided a downgrade on the financial markets, but “maybe things could have been done differently,” Nicusor Dan said.
The price has been steep. The annual inflation rate in Romania in October 2025 was 9.8%, adding pressure on savings and investments. Inflation led to a contraction in real wages. However, Romania avoided worse outcomes, according to the president.
“We were forced to take some measures because Romania borrowed from investment funds, banks, and these people said: if you don’t reduce the deficit, some of us will withdraw, others will lend to you at an even higher cost. So we were entering a vicious circle, and the consequence was that instead of having 10% inflation, we could have had 20–30% inflation,” the president argued.
He added that we must also look to the future with hope, arguing that the Romanian economy has certain opportunities.
“Things will be difficult in 2026, but starting in 2027, there is every hope for growth for the Romanian economy,” Nicusor Dan said.
Until then, a series of increased taxes will further pressure the personal budgets of Romanians. For example, a higher property tax will come into force on January 1, 2026. In the summer, the Romanian government also increased the VAT from 19% to 21%, which led to price hikes down the line already this year.
The sense that other fiscal changes are in the making induced a sense of uncertainty in the local business environment as well, putting a halt to new hires and investments.
(Photo source: Nicusor Dan on Facebook)
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