Another inflationary jump, benchmark rate held again.
A stable leu (against the Euro), unemployment continues to edge up.
The disparate parties of the already shaky coalition found another opportunity to compete with one another – but once again President Dan has shown his political skill.
Monetary Policy
The Banca Nationala a Romaniei (BNR) continues to hold interest rates at 6.5% - one of the highest rates in Europe. Given rampant inflation, no cuts are expected until mid-2026.
Inflation & Currency
Inflation reached 9.9% in August, it’s highest since mid-2023. Most current forecasts suggest 9-9.6% at year end with September being the peak, although we’re not convinced it will fall inside this year – the global and domestic headwinds are just too strong at present. Real GDP growth is forecast to be just 1.4% for 2025, growing to 2.2% in 2026, thanks to uncertainty propelled by US tariffs, Romania’s chaotic domestic politics, and fiscal volatility dampening appetites for consumpti...
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