World Bank downgrades Romania's 2025 economic growth to 0.4%

Business Forum

7 October, 2025 at 3:38 PM

The World Bank has revised Romania's GDP growth forecast for 2025 down to just 0.4%, a significant decrease from the 1.3% estimated in June in its latest report.

The economic slowdown is expected to continue into 2026, with a revised growth forecast of 1.3%, down from the previous 1.9%.

The report attributes the subdued growth to several domestic factors, most notably a fiscal consolidation package that includes a freeze on public wages and pensions, along with higher taxes.

This has put pressure on household spending, with private consumption growth projected to slow to around 1.1% in 2025, a sharp decline from the 5% average between 2000 and 2024. The impact of this is already visible in key indicators: retail sales volume grew by only 3.1% from January to July, compared to almost 9% in 2024, and new car registrations dropped by 22% in the first half of the year.

Meanwhile, the bank projects a modest recovery in 2027, with the economy expected to grow by 2.5%.

Romania, with a fiscal deficit that exceeded 9% of GDP last year, is expected to see this figure fall below 6% of GDP by 2026 as a result of the fiscal package.

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