Romania’s National Commission for Strategy and Prognosis (CNP) has revised its economic growth forecast for 2025 to 0.6%, down from the 1.4% projected in May. The revised outlook will serve as the baseline for the upcoming budget revision.

This compares to the slightly optimistic 1.3% growth projected by Erste Group and the much more pessimistic 0.3% projection affirmed by ING Romania. 

The CNP will publish the next update on the macroeconomic outlook, to be used for the 2026 budget planning, in November.

The revised outlook reflects weaker income dynamics and subdued private and government consumption. Private consumption will rise by only 1.1% and government consumption drop by 2.1% in 2025, a sharp negative revision compared to the previous scenarios.

The government had initially planned the 2025 budget on expectations of 2.5% gross domestic product (GDP) growth under the scenario published in December 2024.

Despite the weaker outlook for real growth, the CNP maintained its projection for nominal GDP at about RON1.9 trillion (€380bn), supported by a higher GDP deflator of 7.4%, compared with 5.8% in the earlier estimate.

The forecasting body also revised its projection for 2026 growth to 1.2%, down from the 2.4% anticipated in the spring and the 3% in the previous autumn outlook published in December 2024.

The lower figures for this year reflect weaker-than-expected momentum in the second half of 2025, following stronger results in the first six months of the year: +1.5% y/y or +1.4% y/y under the seasonally and workday adjusted terms.

CNP calculations suggest that to reach 0.6% growth in 2025, the economy would need to contract by 1.8% quarter-on-quarter in the third quarter, followed by flat performance in the final quarter (this being one of the possible scenarios consistent with the 0.6% overall annual advance).

On a year-on-year basis, this would mean zero GDP growth in the third quarter and a slight contraction in the fourth, offsetting a 1.5% expansion in the first half of the year. This is expressed in the chain-linked volume terms, used by Eurostat in contrast to the deprecated previous-year prices methodology still in use by the statistics office INS. Under PYP methodology, the annual (y/y) growth would remain positive and even strengthen in H2, from 0.3% y/y in H1.

The revised forecast assumes slower household income growth, leading to reduced private consumption. The average net wage is now expected to decline by 0.4% in real terms in 2025. Given a 3.6% year-on-year increase in real wages in the first half, this implies a sharp reversal in the second half, with a projected 4% contraction.

In this scenario, nominal wages are expected to stagnate at June 2025 levels, with no year-end bonuses. While such a scenario was anticipated in the public sector, it was not initially projected for the private sector.