Romania is not in recession but the economy is struggling and showing the first signs of fatigue, Association of Financial and Banking Analysts in Romania president Flavius Jakubowicz told AGERPRES on Friday, mentioning that the 0.2 percent decline in the third quarter of 2025 is not an immediate danger but a warning we cannot afford to ignore, agerpres reports.
'The data published by the National Institute of Statistics for the third quarter of 2025 outline an important economic moment for Romania that requires a balanced and clear headed interpretation. According to the official release, GDP recorded in the third quarter a decline of 0.2 percent compared with the previous quarter on the seasonally adjusted series. At the same time the economy continues to grow annually, plus 1.4 percent compared with the third quarter of 2024 on the adjusted series and plus 1.6 percent on the gross series. Overall in the first nine months of 2025 economic growth reaches 1.4 percent seasonally adjusted. These figures show a dual reality. Romania is not in recession but the economy is clearly slowing down. The quarterly contraction is moderate and not in itself a reason for panic. We do not have two consecutive quarters of decline so we cannot speak of a technical recession. Still this minus 0.2 percent comes in a tense macroeconomic context with internal and external pressures that may affect the pace of growth in the coming months,' Flavius Jakubowicz explained.
He considers that it cannot be ignored that this quarterly decline occurs at a time when the European economy is weakened and external demand remains low.
He argues that for Romania the major risks come from within: a very high budget deficit that requires tough fiscal consolidation in 2026, high financing costs that limit private investment and low productivity that drags down potential economic growth.
The analyst also pointed out that the revisions made by the statistics institute for the second quarter of 2025, where growth was adjusted downwards from 1.2 percent to 1 percent, show that the economy is not only slowing but doing so at a steeper pace than initially expected.
According to him, Romania is in a vulnerable zone where growth is modest and imbalances are large.
'This economic landscape calls for prudence but not pessimism. There is room for a soft landing of the economy if economic policy measures are coherent and predictable. Fiscal consolidation must be credible, focused on making spending more efficient and prioritising investment, not solely on raising taxes. The absorption of European funds must be accelerated because they remain the main driver of growth in a difficult global environment. For the private sector the priority remains careful liquidity management, reducing risk exposure and investing in digitalisation and productivity. And for the population financial prudence is essential in a period with high interest rates and a changing fiscal policy. In conclusion Romania is not in recession but the economy is struggling and showing the first signs of fatigue. The 0.2 percent decline in the third quarter of 2025 is not an immediate danger but a warning we cannot afford to ignore. If the economic policy response is responsible the economy can avoid a recession in 2026. If not the risk of economic contraction becomes much more likely. This is the reality the figures describe, a turning point not a fall. It depends on us whether we manage it as a controlled adjustment or as a slide into recession,' he added.
Gross domestic product fell by 0.2 percent in real terms in the third quarter of this year compared with the previous quarter after an advance of 1 percent in the second quarter compared with the first quarter, according to the flash estimates the National Institute of Statistics published on Friday. Compared with the same quarter of 2024 gross domestic product recorded growth of 1.6 percent on the gross series and 1.4 percent on the seasonally adjusted series. In the period January to September 2025 the economy grew by 0.8 percent compared with the same period last year on the gross series and by 1.4 percent on the seasonally adjusted series.
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