Romania's economy will expand by only 1.4% in 2024, slowing down from 2.4% in 2023 and 4.0% in 2022, but it will gradually recover to stronger growth rates in the coming years: 2.5% in 2025 and 2.9% in 2026, according to the European Commission's Autumn 2024 Economic Forecast.

The rebound will be driven by a gradual recovery in external demand, easing of financial conditions, and resilient private consumption and investment, according to the projection.

The commission expects headline inflation to ease, still remaining above 5% in 2024 (at 5.5%), pushed up by robust disposable incomes. Later, the rise in prices will slow down to 3.9% in 2025 and 3.6% in 2026.

The EC sees the labour market as still tight, putting pressure on unemployment that will remain in the coming two years close to the 5.5% rate seen in 2024.

Romania's general government deficit is forecast to reach 8% of GDP in 2024, much higher than in 2023 (when it was 6.5%). It is expected to stay broadly at that level in 2025 and 2026, assuming no change in current policies. 

The debt-to-GDP ratio is projected to increase to close to 60% in 2026.

iulian@romania-insider.com

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