The latest forecast represents a decrease from the spring forecasts of 1.6% and 2.8%, respectively.
“This moderation is driven by temporarily high inflation and the effects of fiscal consolidation. Inflation is anticipated to remain elevated over the next 12 months before falling below the National Bank of Romania's (BNR) tolerance band by the end of 2026," according to an IMF statement.
The IMF estimates that the risks to the economic outlook are decreasing for growth but increasing for inflation. The international financial institution also notes that the risk of a sovereign rating downgrade for Romania remains. This is due to persistent concerns over the implementation of planned fiscal consolidation in 2025-2026 and the medium-term sustainability of public finances, stemming from the still-high fiscal deficit.
However, robust implementation of fiscal adjustments and European-funded investment projects could bolster investor confidence and reduce risk premiums faster than anticipated.
