The likelihood of Romania entering a recession in the first half of 2026 is high, according to the Concordia Employers’ Confederation, which pointed to weakening consumption, persistent inflation, and mounting pressure on companies’ investment plans.
Concordia argued that inflation is increasingly eroding purchasing power and consumer confidence, with visible effects in retail data, Economedia.ro reported. The volume of retail sales has been contracting steadily since H2 2025, with the annual decline reaching 6.2% in February 2026. The drop is even sharper in non-food goods (-9.4%), a segment seen as a key indicator of household sentiment and uncertainty.
Subdued consumption was already expected to weigh on growth this year. The state forecasting body CNP projected a 0.8% contraction in private consumption in 2026, to be offset by a 4% increase in gross fixed capital formation, resulting in overall GDP growth of around 1%. A more solid recovery in consumption is only anticipated from 2027 onward.
However, Concordia warned that the broader economic environment is becoming increasingly challenging. Companies are facing higher energy and raw material costs alongside persistently elevated financing costs, while pressure from the state on domestic financial markets is limiting access to cheaper funding.
As a result, firms are being forced to absorb part of these cost increases, which is already reflected in downward revisions of investment plans and tighter liquidity management.
The business group described the current dynamics as typical for periods marked by high inflation and external uncertainty, stressing that the economy is undergoing a recalibration rather than entering a structural crisis.
“There are prospects for a recovery, but it is conditional. In the short term, the data tempers any optimism,” Concordia said, adding that a rebound will depend on stabilizing inflation, restoring confidence among consumers and businesses, and maintaining a predictable macroeconomic framework.
iulian@romania-insider.com
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