CPAG publishes the Macro Risks Report: twin deficits, financing conditions and inflation dynamics remain central themes for Romania's macro outlook

Bucharest, 22 January 2026 - Consilium Policy Advisors Group (CPAG) is publishing today the Macro Risks Report, which provides a data-driven overview of Romania's economy in a regional context and the factors currently shaping its macroeconomic outlook.

Twin deficits remain a relevant structural feature: a high budget deficit alongside a high external deficit (imports exceeding exports). As a result, macroeconomic stability depends more heavily on financing flows and may be more exposed to shifts in confidence and changes in international financial conditions.

Public debt has continued to increase, as expected, reaching 58.9% of GDP in Q3 2025, while parts of the private sector are reducing leverage. In this context, macroeconomic resilience depends increasingly on the evolution of the government's financing needs and on the predictability of the fiscal framework.

Fiscal measures appear to be starting to deliver results. Long-term government bond yields have fallen to around 6.8%, down from a year earlier. However, higher financing needs have led to an increase in interest costs in the state budget.

Annual inflation has remained persistent at around 10%, driven mainly by higher VAT and excise duties, as well as the liberalisation of electricity prices.

Credit growth continues to run below inflation, while the increased use of the euro in deposits and lending suggests greater sensitivity to foreign-exchange risk. In the labour market, unemployment rose to 6%, the number of job vacancies declined, and net wage growth slowed to 7% in the first 11 months of 2025 - signals consistent with moderating demand dynamics.

Against this backdrop, GDP grew at an annual rate of 0.9% in the first nine months of the year, supported by investment and net exports.

"Twin deficits, rising public debt, low economic growth and high inflation point to a fragile macroeconomic environment, despite marginal improvements. In this context, public policies focused on competitiveness and expanding the economy's potential can create a turning point towards a new cycle of faster and sustainable growth," said Ella Kallai, CPAG Co-Founder.