The World Bank has significantly revised its estimates regarding the evolution of the Romanian economy this year, from 1.3% as it estimated in January, to 0.5%, according to the Europe and Central Asia (ECA) Economic Update report, published on April 8 by the World Bank Group.
The World Bank also revised its estimates downward for 2027, when the Romanian economy is expected to register a growth rate of 1.4%, compared to 1.9% as estimated in January.
On the upside, the WB trusts Romania can bring the public deficit, measured under ESA terms, below 6% of GDP in 2027.
“Amid the government’s fiscal adjustment efforts, the pace of economic expansion slowed sharply in Romania. Tighter fiscal policy, including freezes on public sector wages and pensions, as well as restrictive monetary policy, weighed heavily on private consumption. It grew by 0.6% last year, down sharply from nearly 6% in 2024, reducing overall growth to 0.7%, the country’s slowest expansion since the COVID-19 pandemic,” the World Bank report said.
On the other hand, World Bank experts point out that, thanks to a solid reform package, which includes tax increases and spending freezes, Romania managed to reduce the budget deficit to 8% of GDP last year, from 9.3% in 2024, despite slower output growth. Under these conditions, the World Bank estimates that Romania’s budget deficit will fall below 6% of GDP by 2027.
At the regional level, the report notes that economic growth in developing countries in Europe and Central Asia (ECA) is likely to slow significantly this year, due to the impact of the Middle East conflict, geopolitical tensions, and trade fragmentation. Economic growth in the region is expected to decline to 2.1% in 2026.
In Russia, growth is forecast to slow to 0.8%, while in the rest of the region the pace of expansion is expected to moderate to 2.9%, amid higher energy costs, which are holding back consumption, and uncertainties affecting investment.
(Photo: Diony Teixeira/ Dreamstime)
iulian@romania-insider.com
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