Today’s flash GDP data shows that the economy remained under pressure in the second quarter. While the outlook should gradually improve in the months ahead, the weak starting point inherited from late 2025 makes it difficult to avoid an overall contraction in 2026. We hold on to our forecast for GDP to decline by 0.5% this year, with downside risks at play.
As this is only a flash release, the information available beyond the headline figures is limited. Even so, one message stands out: despite ongoing discrepancies between the gross and chain-linked GDP series, Romania’s economy essentially stagnated in the first half of 2026 following the sharp contraction recorded at the end of last year. GDP was unchanged in 2Q26 versus the previous quarter, while annual growth stood at -0.4% based on the gross series and -2.0% based on the chain-linked series.
Strong public investment has likely prevented a deeper downturn, but it has once again failed to fully offset weak domestic demand. On the supply side, the divergence between subdued industrial activity and resilient construction output likely remained during the quarter. These patterns have characterised the Romanian economy throughout the past year and continue to point to an environment of weak growth and elevated inflation.
A flat quarterly reading is still a relatively soft outcome, although the economy appears to have weathered several headwinds better than feared. The energy price shock, political turmoil following the change in government and heightened geopolitical uncertainty all posed significant risks to activity. Revisions to today’s figures cannot be ruled out when the detailed GDP breakdown is published on 7 September.
Looking through the statistical noise, however, the broader picture remains unchanged. The economy is down 0.8% in the first half of the year compared with the same period of 2025. We expect conditions to improve gradually in the second half, supported by recovering business and consumer confidence and the rollout of several large infrastructure projects.
That said, any improvement is likely to be too little too late to materially change the growth picture for 2026. We continue to believe the economy will struggle to avoid an annual contraction this year and maintain our forecast for GDP to decline by 0.5% with downside risks, before recovering to 2.2% growth in 2027.
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