A permanent 10% increase in oil prices would have an annual impact on inflation of about 0.3%, which would completely cancel out current inflation estimates, said on Tuesday the deputy governor of the National Bank of Romania, Cosmin Marinescu.
“The worsening security situation in the Middle East severely amplifies uncertainty and increases volatility at a global level, especially in energy markets, but also in financial markets, which are very sensitive to such geopolitical and security turbulence. Estimates regarding the macroeconomic impact of the increase in oil prices indicate certain contagion risks for European economies, including in the case of Romania, and the prospect of a prolonged, large-scale conflict will highlight a propagated and persistent impact. Romania has a lower net dependence on oil energy imports than other European economies, which amounts to about 1.5% of GDP as an annual average for the period 2022-2024, but decreasing towards 1% of GDP for 2025. However, the exposure to the consumer goods price channel remains important. Our estimates show that a permanent 10% increase in oil prices will have an annual impact on inflation of about 0.3%, which, unfortunately, would completely cancel out current inflation estimates. We do not rule out that the Gulf War will extend over a longer period, a situation that could turn, including for European economies and therefore for us, for Romania, into a double-edged sword”, said Cosmin Marinescu, according to Agerpres.
He mentioned that there is also the prospect that large investment funds, which are already very attentive to developments in the Gulf area, will reconsider some of their exposures at a global level.
“We, at the National Bank of Romania, have repeatedly said that there is no rational alternative to the need to consolidate public finances, an objective that requires consistency over the years. Reducing the budget deficit is not optional, it is an essential condition for the credibility of state policies and for macroeconomic stability. Only in this way can we return to financial sustainability and correct structural imbalances. As the Central Bank, we take the issue of fiscal consolidation very seriously, including from the perspective of the impact on inflationary pressures and sovereign risk. The magnitude of budget deficits, doubled by the deterioration of the external balance, obliges us to make proportionate adjustment efforts. In 2025, the important effort to adjust the budget position, assessed at 1.3 percentage points of GDP in ESA terms, did not translate into a corresponding reduction in the current account deficit,” said Cosmin Marinescu.
According to the NBR deputy governor, the current account deficit’s share in GDP has only slightly decreased, to 7.95% compared to 8.2% of GDP in 2024.
“These are high levels that also betray structural deficiencies. However, the good news is that the coverage of the external deficit from stable, non-debt-generating flows continues to improve during the current year, from 42% in 2025, to an estimated annual level of 57%, thanks to the high flow of European funds. At the same time, macroeconomic developments in 2025 show that the economy is gradually changing its sources of growth. According to the INS updates, economic growth for 2025 has advanced slightly, to 0.7%. We can say that it is an economic performance that cannot be neglected in a year characterized by the pressure of fiscal-budgetary adjustment measures. Particularly important for 2025 is the increased contribution of investments to consumption contribution, a contribution of 1% compared to only 0.4% in the case of consumption”, said Cosmin Marinescu.
He stressed that we must continue and accelerate this path of economic growth through measures to expand competitiveness in the business environment, in order to achieve a turnaround in production that shifts the emphasis from demand to supply, and therefore from consumption to domestic production.
“However, strengthening trust in state policies is essential for supporting investments. In this regard, we hope to have the 2026 budget soon, which will provide a signal of political and economic stability, a particularly important signal in the complicated period we are going through”, said Cosmin Marinescu.