Romania modifies GDP growth estimate, putting off expectations for industrial revival
Here's a fresh take on the topic:
In a surprising twist, Romania's economic growth forecast has taken a turn for the worse. The nation's state forecasting body, CNP, has announced a significant downgrade from the initial 2.5% economic growth projection included in the 2025 budget planning to a revised 1.4%.
This revised forecast, however, paints a brighter picture compared to the paltry 0.8% advance anticipated for 2024. The economy is expected to pick up steam starting from 2026, with growth strengthening to 2.4% (initially forecasted at 3.0%). This momentum is likely to continue into the following years.
Industrial production, on the other hand, appears to be struggling. The sector is expected to contract by 1.5% this year under the revised forecast, although it had shown a 0.4% y/y advance under the previous forecast issued in December. In value-added terms, the industry will contract by 1.3% this year.
On a positive note, the sectors of agriculture and construction are expected to bounce back this year. Agriculture, which suffered a setback of -3.9% last year, is projected to grow by +5.0% (in value-added terms). The construction sector, previously experiencing a -2.9% decline, is expected to recover with an annual growth rate of +3.8% (in value-added terms). Interestingly, these sectors are anticipated to contribute 0.2 percentage points and 0.3 percentage points, respectively, to Romania's economic growth this year.
The real star of the show, however, is the services sector. With a 1.9% year-over-year advance in value-added generation, it's expected to be the biggest contributor to Romania's economic growth this year, accounting for an additional 1 percentage point.
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NOTE: According to up-to-date information from several financial and international institutions:
- For 2025, Romania's economic growth projection has been significantly revised downward. The World Bank projects a GDP growth of about 1.3%, close to the Romanian government's own revised forecast of 1.4% issued in May 2025. ING Bank Romania, reflecting weak growth momentum and downside risks, lowered its 2025 GDP growth forecast to 0.8% from an earlier 1.2% estimate. This reflection of a fragile economic environment with flat quarterly growth and modest year-on-year advance is as of Q1 2025[1][5].
- For 2026, the outlook remains moderate but somewhat improved compared to 2025. The World Bank projects growth will pick up slightly to 1.9%, down from earlier estimates of 2.6%. ING maintains its 2026 growth estimate at 2.2%. OECD forecasts are somewhat more optimistic, projecting GDP growth of around 2.4% for 2026[1][2][4][5].
- Beyond 2026, Romania's economy is expected to return to a more normal, sustainable growth path, with the World Bank forecasting a rebound to about 2.5% growth in 2027. The growth trajectory after 2026 is seen as a gradual recovery from the weaker performance in 2025 and 2026, influenced by factors such as fiscal consolidation, energy price liberalization, and EU fund investments[1][5].
Sources:[1] World Bank - Romania Country Profile[2] OECD - Romania Economic Outlook[3] ING Bank Romania - Romania Economic Insight[4] European Commission - Romania Country Page[5] CNP (National Commission for Prognosis) - Forecast Reports
In light of the revised forecasts from financial and international institutions, the 2025 economic growth prediction for Romania has been significantly reduced, with the World Bank and ING Bank Romania projecting growth of approximately 1.3% and 0.8%, respectively. Despite this reduction, the business sector remains optimistic about Romania's economic recovery, with the economy expected to strengthen starting from 2026.
