Romania’s statistics office, INS, has confirmed an economic slowdown in 2025 (chart), slightly revising the annual growth rate to 0.7% from the 0.6% flash estimate, according to preliminary data published on March 6.

The growth episodes were concentrated in the middle of the year. According to the national statistics office's methodology, economic activity expanded mainly in the third quarter (+1.7% y/y), following the political stabilisation in July. Under the chain-linked methodology used by Eurostat, growth was recorded in both the second and third quarters (+2.5% y/y and +1.3% y/y, respectively).

However, the economy weakened significantly toward the end of the year, after the fiscal consolidation measures were enforced by the new executive set up in June. Under the chain-linked methodology, GDP contracted by 1.3% y/y in the fourth quarter. In seasonally adjusted terms, quarterly GDP declined by 0.1% q/q in Q3 and by 1.9% q/q in Q4, indicating a technical recession.

The outlook for the first half of 2026 remains moderate. A modest recovery had been expected in the second half of the year, but expectations have deteriorated more recently due to the global energy price outlook following the Middle East conflict.

By sector (chart), strong growth in construction (+7.0% y/y), information technology and communications (+4.1% y/y), and agriculture (+6.6% y/y), which recovered after weaker crops in 2024, partly offset the weaker performance in the services sector, in full 2025. Business-to-business services in particular declined sharply (-4.0% y/y).

On the demand side (chart), final consumption remained broadly unchanged in 2025 compared to 2024 in real terms, while gross fixed capital formation increased by 4.0% y/y. Investment growth was particularly strong in Q3 (+.1% y/y) and Q4 (+7.9% y/y).

At the same time, negative changes in inventories in Q3 and especially in Q4 moderated overall domestic demand, which remained relatively robust in Q3 (+2.3% y/y) but turned slightly negative in the final quarter of the year (-0.16% y/y).