In December 2025, the National Bank of Romania (BNR) released a report highlighting significant risks to the country’s financial stability. The principal concerns stem from substantial budget deficits and internal imbalances, occurring against the backdrop of a sluggish economy. For instance, the economy recorded a mere 0.3% growth in the second quarter, followed by a projected growth rate of only 1.6% for the third quarter.
These economic challenges have been exacerbated by the fiscal measures implemented by Prime Minister Bolojan’s government, which aim to reduce the budget deficit. Unfortunately, these measures have inadvertently led to a curtailment of both consumer spending and investments. This contraction in economic activity has prompted downward revisions of growth forecasts by authoritative bodies such as the European Commission and the International Monetary Fund (IMF).
To put the situation into perspective, the budget deficit reached a staggering 102.5 billion lei in the first nine months of 2025. Consequently, the public debt has surged to 57.2% of the Gross Domestic Product (GDP). Such figures indicate a troubling fiscal trajectory that the BNR believes could erode investor confidence. A continued reliance on these fiscal policies may result in higher financing costs and increased volatility in the currency market, posing further challenges to economic stability.
The report suggests that the government’s current fiscal path could be detrimental to attracting investments, which are crucial for stimulating growth. With a shrinking economic activity landscape, the risks of stagnation become more pronounced, further emphasizing the need for a strategic re-evaluation of fiscal policies.
European Union funds are seen as a pivotal avenue for Romania’s economic recovery. The BNR urges the government to expedite the absorption of these funds to alleviate some of the immediate fiscal pressures and to support more sustainable growth in the long term. Efficient use of EU funding can not only help mitigate the current fiscal deficits but also foster an environment conducive to investment and economic resilience.
However, the urgency of the situation cannot be overstated. As global economic conditions evolve, Romania must be proactive in addressing its internal challenges to retain investor confidence. A lack of decisive action could lead to long-term consequences, such as diminished growth potential and increased borrowing costs.
In conclusion, the findings of the BNR outline a complex narrative for Romania’s economy, with both immediate risks and long-term ramifications. While the task ahead is formidable, the strategic utilization of European funds, coupled with prudent fiscal management, could provide a pathway to stronger economic performance. The stakes are high, and the actions taken in the coming months will be pivotal in determining the future stability and growth trajectory of Romania’s economy.