A significant inflationary spike, steady interest rates, and a very fragile coalition government – Romania watching is not for the faint of heart at present.
Monetary Policy
The Banca Nationala a Romaniei (BNR) continues to hold interest rates at 6.5% - one of the highest rates in Europe. No cuts are expected until mid-2026.
Inflation & Forecasts
Just as we predicted, inflation hit 9.6-9.7% in September having already hit a one-year high of 5.7% in June, and growing further to 7.84% in July. September’s high was sparked by tax hikes and the June expiration of electricity price caps. Inflation is expected to dip downward towards 8.8% by year end.
Domestic Politics
Romania’s current government is a broad coalition originally formed in June this year. It is comprised of the National Liberal Party (PNL), Save Romania Union (USR), the Democratic Alliance of Hungarians in Romania (UDMR), and the Social Democratic Party (PSD), along with 17 representatives of national minorities. This smo...
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