A rocky period for Romania. Persistent, higher than EU average unemployment, high government deficit, austerity measures being put in place, and now 15% US tariffs on EU goods. Ambitions to join the Euro are having to be put on hold again.
Monetary PolicyFor a fifth time, after meeting on 5th August the Banca Nationala a Romaniei (BNR) held interest rates at 6.5% – one of the highest rates in Europe. No cuts are expected until mid-2026. Romania has among the highest government deficits in Europe at 9.3% of GDP, linked to large increases in public wages and pensions. That said, stringent fiscal measures are now being implemented, leading to forecasts that the deficit will fall to 8.6% of GDP in 2025 and 8.4% in 2026. These austerity measures include a VAT hike and freezing of public sector wages/pensions. The VAT increase and the removal of the electricity price cap are expected to put upward pressure on prices in the short term, something the BNR has openly acknowledged.
EuroEver since...
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