According to the latest release by the Romanian National Institute of Statistics, the Romanian GDP grew by 1.7% YoY for the unadjusted series and by 1.5% YoY for the seasonally adjusted data, as compared to Q3 2024. However, on a quarterly basis, the economy contracted by 0.2% QoQ in real terms. As a result, the GDP amounted to RON 487bn in Q3 2025. In this short overview, we bring you all the details.
Romania is currently navigating its most challenging fiscal period since the Global Financial Crisis. The country recorded a budget deficit of 9.3% of GDP in 2024, the highest in the European Union, which prompted the European Commission to place Romania under the Excessive Deficit Procedure (EDP). In June 2025, the Commission determined that Romania had failed to take effective corrective action, warning of potential suspension of EU funds. In response, the government led by Prime Minister Ilie Bolojan moved decisively and enacted a comprehensive fiscal consolidation package in July 2025, estimated at roughly 5% of GDP spread over H2 2025 and 2026. Key measures implemented on August 1, 2025, included raising the standard VAT rate from 19% to 21%, unifying reduced VAT rates at 11% (replacing the previous 5% and 9% brackets), increasing excise duties on fuels, alcohol and tobacco by approximately 10%, introducing a 10% health contribution on pensions above RON 3,000/month, doubling the bank turnover tax from 2% to 4%, and freezing public wages and pensions at November 2024 levels. A second package followed in September with increased property and environmental taxes.
The fiscal tightening appears to be showing early results. According to Prime Minister Bolojan, the budget deficit reached 6.4% of GDP in November 2025, compared to 7.15% in the same period of 2024, a notable improvement that suggests the consolidation measures are gaining traction. Nevertheless, the European Commission’s Autumn 2025 forecast still projects a full-year deficit of 7.9% of GDP for 2025, declining to 6.2% in 2026 and to 5.9% by 2027.
Romanian seasonally-adjusted quarterly YoY GDP development (2010 – Q3 2025, %)
Source: Romanian National Institute of Statistics, InterCapital Research
In Q3 2025, the GDP growth of 1.5% YoY represents a continuation from the H1 2025 (0.7% YoY in Q1 and 2.2% in Q2). Looking at GDP components, total final consumption contributed 0.5 p.p. to growth, with household consumption rising 0.8% in volume YoY. Gross fixed capital formation contributed 1.6 p.p., recording a solid 5.0% volume increase, indicating resilient investment activity partly supported by EU funds. Net exports contributed 0.6 p.p., as exports grew 5.3% while imports increased 3.1%. On the negative side, the change in inventories subtracted 1.0 p.p., while collective government consumption declined 3.9%, subtracting 0.4 p.p., clearly reflecting the impact of austerity measures.
On the production side, construction was the standout performer with 12.2% volume growth YoY, contributing 0.8 p.p. Agriculture also performed strongly at 9.2%, contributing 0.6 p.p., while information and communication grew 6.1%, adding 0.4 p.p. On the other hand, professional, scientific and technical activities contracted significantly by 4.7%, subtracting 0.5 p.p. Financial intermediation and real estate activities did not contribute to growth.
For the first nine months of 2025, cumulative GDP growth stands at 0.9% YoY (unadjusted), with GDP reaching RON 1,340bn. The 9M data shows final consumption growing just 0.1% YoY, with household consumption up 0.8% but collective government consumption contracting 3.5% – reflecting fiscal consolidation. Gross fixed capital formation rose 3.0%, while exports grew 4.2% and imports 5.5%. On the production side, construction led with 8.5% growth, followed by agriculture at 6.8% and ICT at 2.9%. Industry contracted 0.4%, financial services fell 0.7%, and professional services declined 3.7%.
Overall, the Romanian economy is showing modest resilience despite aggressive fiscal tightening. Projections from our IC Macro Outlook projects full-year GDP growth of just 1.2% in 2025 and 1.5% in 2026, with growth potentially accelerating above 2% by 2027 as consolidation eases. All three major rating agencies rate Romania at the lowest investment-grade level with a negative outlook. The key question remains whether Romania can sustain fiscal adjustment while avoiding a deeper slowdown, and whether the government can absorb available EU funds, where RRF absorption remains below 35%, to offset austerity impacts. With inflation elevated at 9.8%, unemployment at 6%, gas price caps expiring in March 2026, and structural reforms pending, the outlook remains challenging but cautiously constructive if the consolidation path is maintained.