The European Bank for Reconstruction and Development (EBRD) has revised downwards, to 0.9%, the growth forecast for the Romanian economy for 2025, compared to 1.6% as estimated in May, according to the “Regional Economic Prospects” report, published on Thursday by the international financial institution.

According to the EBRD’s latest forecasts, Romania’s GDP is expected to grow by 0.9% this year, 0.7 percentage points less than the previously advanced estimate of 1.6%, according to Agerpres.

In 2026, the growth of the Romanian economy is expected to be 1.6%, after the EBRD predicted an advance of 2.4% in May.

Romania’s GDP expansion slowed in 2024, to 0.8%. Industry, services and construction slowed significantly, while agriculture was severely affected by drought. In the first half of 2025, average annual growth was 1.4%, amid slowing wage growth, a deteriorating external balance and a decline in industry. On the other hand, investment recovered after a significant decline in the fourth quarter of 2024, and agriculture is expected to recover substantially this year. Business confidence was negatively affected by political instability in the first half of 2025 and fiscal austerity measures, estimated at 5.5% of GDP over the next two years, the report said.

The fiscal deficit in the first half of 2025 (3.6% of GDP) points to an annual deficit of close to 8% of GDP, down from 9.3% of GDP in 2024. The liberalization of the energy market in July and the increase in VAT and excise duties in August 2025 are expected to contribute four percentage points to annual inflation, which is expected to reach 8.8% at the end of the year, significantly higher than the EU average, according to the NBR.

Economic growth is estimated at 0.9% in 2025, to reach 1.6% in 2026, following the acceleration of the absorption of European funds. Downside risks are related to weaker exports and reduced public investment, the EBRD predicts.