Research Paper June 2026

Macro Risks Report
Romania · June 2026

A data-driven snapshot of Romania's macroeconomic outlook in a regional context — covering stagflation, twin deficits, inflation, monetary policy, unemployment, and GDP growth. Q1 2026 data.

By Ella Kállai, Co-founder · Consilium Policy Advisors Group · office@cpag.ro · www.cpag.ro

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📉
−1.2%
Annual GDP Growth
Real, annual % change
Q1 2026 · vs. +0.3% in Q1 2025
Recession · lowest in region
🛒
10.9%
Annual Inflation
CPI, annual % · HICP 9.7%
May 2026
Highest in EU since Jan 2024
🏦
6.5%
Policy Rate
NBR reference rate, pa
NBR · Jun 2026 · held since Aug 2024
Highest in EU
👷
6.3%
Unemployment
Monthly rate · 4M avg 6.4%
Apr 2026 · ↑ from 6.0% in 2025
Higher plateau
🏛️
−1.2%
Budget Deficit
% of est. GDP · 4M cumulative
4M 2026 · less than half of 4M 2025
Primary deficit balanced
🌍
−2.0%
Current Account
% of est. GDP
4M 2026 · ↓ 20% vs. 4M 2025
Twin deficit vulnerability
💵
60.2%
Public Debt
Gross, % of GDP
Q1 2026 · exceeded Maastricht 60% limit
Critical limit
💱
1.6%
RON / EUR Depreciation
Average exchange rate
5M 2026 vs. 2025
Depreciation pressure

Report Sections

Six thematic analyses — data from Eurostat, NBR, Ministry of Finance, INSSE, ECB, European Commission

📋
Section 01
Executive Summary
Macro Debriefing – June 2026 · Stagflation
Corrective measures to stabilize the budget deficit and the re-bursting of inflation weakened economic confidence and pushed the economy into recession. GDP declined 1.2% YoY in Q1 2026 (vs. +0.3% in Q1 2025). The Middle East energy crisis pushed CPI to almost 11% YoY; high inflation expected to last until H2 2026.
🏛️
Section 02
Twin Deficits
Impressive correction of the budget deficit in 4M 2026
The consolidated budget deficit was 1.2% of GDP and the current account deficit 2% of estimated GDP in 4M 2026 — both roughly half the 4M 2025 figures. The primary budget deficit was balanced (deficit ≈ interest payments). Gross public debt exceeded the Maastricht threshold (60% of GDP) for the first time in Q1 2026. Public financing need expected to rise to EUR 55bn in 2026 (+12.2% YoY).
🛒
Section 03
Inflation
Annual CPI inflation at 10.9% in May 2026
Harmonized annual inflation at 9.7% in May 2026 — the highest in the EU since Jan 2024. Of the 1.6pp CPI increase from February to May, almost all (94%) was due to energy prices. Rising energy costs from the Middle East conflict led the NBR to raise its end-2026 CPI estimate to 5.5% (from 3.9%), keeping end-2027 unchanged at 2.9%.
🏦
Section 04
Monetary Policy
Reference rate unchanged at 6.5%
The NBR maintained the policy rate at 6.5% pa (highest in EU, held since Aug 2024), caught between the slowdown and rising inflation. The differential vs. ECB main refinancing rate narrowed to 4.1pp after the ECB began tightening in June 2026. RON/EUR depreciated 1.6% in 5M 2026 vs. 2025. No change likely at the July 8, 2026 meeting. Euroization of loans and deposits maintained.
👷
Section 05
Unemployment
Higher plateau · wage inflation below CPI since Jul 2025
Average unemployment rose to 6.4% in 4M 2026 from 6.0% in 2025. Vacancies declined 13.3% in Q1 2026 vs. Q1 2025. Labour market tightness eased — unemployed per vacant job rose from 16 (2025) to 18.5 (Q1 2026), the highest since 2014. The 12M average net wage grew just 4.7% in Apr 2026 (6.5% in Dec 2025). Job destruction occurred across all sectors, strongest in manufacturing.
🏗️
Section 06
GDP Growth
Real annual GDP growth −1.2% in Q1 2026
GDP contracted 1.2% YoY in Q1 2026 — the lowest in the region. Supply driver: construction; demand drivers: gross fixed capital formation (+4.7% YoY) and net exports (+0.2pp contribution vs. -2.8pp in Q1 2025). The GFCF contribution was offset by the rundown of inventories. Labour productivity was just 46% of the EU average — the lowest in the region.

Twin Deficit Forecasts 2026–2027

% of GDP · CPAG vs. European Commission Spring Forecast 2026

Indicator20262027
Source: CPAG
Budget deficit (ESA)−6.6%−5.8%
Current account deficit−7.7%−7.5%
Gross public debt62%64%
Source: European Commission Spring Forecast 2026
Budget deficit (ESA)−6.2%−5.8%
Current account deficit−6.9%−6.4%
Gross public debt61.6%63.4%
Source: CPAG; European Commission Spring Forecast 2026; Eurostat, Romanian Ministry of Finance, NBR. Gross public debt exceeded the Maastricht threshold (60% of GDP) in Q1 2026.

Latest Inflation — Regional Comparison

Year-on-year · May 2026 · Romania remains the highest in the EU

CountryCPI rate (YoY)HICP rate (YoY)
🇷🇴 Romania10.9%9.7%
🇨🇿 Czechia2.1%1.8%
🇵🇱 Poland3.1%3.3%
🇭🇺 Hungary1.8%2.3%
🇪🇺 Euro zone—3.2%
🇺🇸 United States4.2%—
Source: INSSE — Romanian National Statistics, central banks of RO/HU/CZ/PL, Federal Reserve Bank of St. Louis, Eurostat, European Commission. All readings May 2026.

Risk Assessment 2026

Key upside and downside risks identified by the report for the year ahead

Twin Deficits — Downside & Upside Risks
  • DownsideFaster deficit reduction if fiscal discipline strengthens with EU funding support
  • DownsideLower interest rates on government borrowing as markets acknowledge fiscal consolidation
  • DownsidePrivate sector entering a saving mood due to geopolitical tensions
  • UpsideSlower deficit reduction due to lower tax revenues from economic slowdown
  • UpsideExports might be hit by geopolitical tensions
Inflation — Risk Assessment 2026
  • UpsideMiddle East conflict, if prolonged, will increase the price of oil and petroleum products
  • UpsideIn 2024 Romania imported 13m tonnes of oil and petroleum products; 76% of final consumption used in transport
  • DownsideGradual disinflation expected: NBR projects 5.5% YoY by Dec 2026 and 2.9% by end-2027
Monetary Policy — Lower Reference Rates
  • ConditionIf inflation decelerates faster than expected
Monetary Policy — Higher Reference Rates
  • ConditionIf inflation remains sticky above 7% throughout 2026 due to the energy shock
  • ConditionIf depreciation pressures on RON intensify beyond what is considered harmful for inflation
Labour Market — Downside Risks Dominate
  • DownsideLow vacancy rates across all sectors reduce hiring
  • DownsideUncertainties in global trade might lower employment in export sectors (industry and services)
  • DownsideImpact of AI biased towards job destruction rather than job creation
  • DownsideReal wages continuing to decline as wage growth remains below inflation
  • UpsideRetail trade and construction sectors continue to expect rising employment; EU-funded investments support construction
GDP Growth — Headwinds & Tailwinds
  • HeadwindInflation persistency reduces consumer purchasing power and consumption
  • HeadwindFiscal consolidation path limits government spending and investment support
  • HeadwindUS tariffs (20% on EU products, 25% on steel and aluminium) reduce exports
  • TailwindAccession of EU funds supports investments and gross capital formation
  • TailwindNegative real interest rates support borrowing and business expansion

Labour Productivity & Costs

Q1 2026 · Romania vs. regional peers · Source: Eurostat

Labour Productivity
46%
of the EU average · lowest in the region (Q1 2026)
Romanian labour productivity is lower by 25% than in Poland, 9% than in Hungary, and 37% than in Czechia.
Labour Cost
~50%
of the EU average · broadly stable (Q1 2026)
Romanian labour costs are lower by 8% than in Hungary, 16% than in Poland, and 30% than in Czechia.
Productivity per Labour Cost
Labour productivity per unit of labour cost — a measure of business profitability:
🇭🇺 Hungary 2.1
🇨🇿 Czechia 2.0
🇵🇱 Poland 1.9
🇷🇴 Romania 1.8

Overall, doing business in Romania is almost as profitable as in Poland, less profitable than in Czechia and Hungary. Labour productivity per labour cost stands at 1.8 in Romania, vs. 2.1 in Hungary, 2.0 in Czechia and 1.9 in Poland.

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