Romania’s economy contracted by 0.4% in the second quarter of 2026 compared to the same period in 2025, according to unadjusted data, whereas a year earlier, the country’s GDP had grown by 0.3%. This is according to preliminary data from the National Institute of Statistics of Romania (INS), published on September 7.
At the same time, compared to the first quarter of 2026, GDP remained virtually unchanged. According to seasonally adjusted data, the decline in the second quarter amounted to 2% on an annualized basis. Thus, this primarily reflects the economy’s shift to negative annual growth rather than a new quarterly decline.
In the first half of 2026, Romania’s GDP fell by 0.7% compared to January–June of the previous year based on unadjusted data and by 1.6% based on the seasonally adjusted series.
By comparison, in the first half of 2025, Romania’s economy grew by 0.3% year-over-year. In the second quarter of last year, GDP also increased by 0.3% according to unadjusted data, while the seasonally adjusted series showed growth exceeding 2% at that time. Thus, over the course of the year, the performance of Southeast Europe’s largest economy has noticeably deteriorated.
The main pressures on the economy in the first half of 2026 came from trade, transportation, the hotel and restaurant sector, manufacturing, IT and telecommunications, as well as the real estate market. Trade, transportation, warehousing, hotels, and restaurants—which account for about 21.6% of GDP—saw their output decline by 3.9% and made a negative contribution to GDP growth of 0.9 percentage points.
Manufacturing, which accounts for about 16% of the economy, contracted by 2.9% and reduced overall GDP growth by another 0.5 percentage points. The information and communications sector declined by 3.5%, and real estate transactions by 4.5%.
The decline was partially offset by construction. The volume of work in the sector increased by 12.3%, and its positive contribution to GDP amounted to 0.7 percentage points.
Individual indicators confirm the weakness of the industrial sector: Romania’s industrial production in January–June 2026 contracted by 3.3%, including a 4.4% decline in the manufacturing sector.
The deterioration in GDP growth is occurring against the backdrop of large-scale fiscal consolidation and persistently high inflation. In its spring forecast published on May 21, the European Commission projected that Romania’s economic growth in 2026 would amount to only 0.1%, following 0.7% in 2025. In 2027, Brussels forecasts that growth will accelerate to 2.3%.
According to the European Commission’s assessment, the slowdown is primarily due to a decline in real disposable income and consumption amid fiscal consolidation and high inflation. Average inflation in Romania in 2026 is forecast at 7%, and the government budget deficit is expected to shrink from 7.9% of GDP in 2025 to 6.2% of GDP this year. The economy is expected to be supported by investment projects—particularly those funded by the EU—as well as net exports.
