Data on the structure of GDP confirm that Romania’s economy is going through a structural transition: the consumption-based growth model is losing strength, while investments become the main driver of economic progress.
According to GDP growth breakdown data for the fourth quarter of 2025, the economy contracted by 1.9% against the previous quarter. As the previous quarter had also recorded a decline, Romania is in a technical recession in the second half of 2025, the second such episode after the one in the first half of 2024.
In annual terms, real GDP went up 0.2% in the last quarter of 2025, and for the entire year, economic growth stood at 0.7%, slightly slowing down compared to 0.9% in 2024. This is the second consecutive year in which the economy has been evolving well below potential, despite high budget deficits, states BCR analyst Vlad Ioniță, in a note issued to investors.
Investments, 1pp contribution to economic growth in 2025
However, the structure of growth indicates an important change in the economic model, in his opinion. In terms of demand, private consumption had a modest contribution of only 0.4 percentage points to the 0.7% GDP growth in 2025, while public consumption had a negative contribution of -0.3 percentage points, reflecting a weak overall consumption dynamic.
On the other hand, investments became the main driver of the economy, contributing 1 percentage point to GDP growth in 2025, although „quarterly evolution was relatively flat, which also suggests favorable base effects,” according to the BCR economist. Net exports had a negative contribution for the full year, of -0.6 percentage points, while the change in inventories had a relatively neutral contribution, of 0.2 percentage points.
ING Romania economist Ștefan Posea also points out the extremely modest contribution of consumption to GDP growth compared to long-term averages: 0.4 pp compared to 3-4%.
„These low rates highlight the limits of Romania’s long-standing consumption-based economic model. The current adjustment phase reflects a rebalancing towards investment-led growth, which should begin to support the economy’s productive capacity,” the expert pointed out in a note to investors.
In terms of supply, construction was the sector with the largest contribution to economic growth, adding 0.5 percentage points to GDP growth in 2025.
Agriculture contributed 0.2 percentage points, industry had a neutral contribution, and services had a slightly negative impact of -0.1 percentage points, although the IT&C sector continued to generate some of the growth momentum.
Pressure on net exports in the second half of the year
BCR economists maintain the economic growth forecast for 2026 at 1% of GDP.
Regarding the outlook for 2026, Vlad Ioniță estimates that „household consumption is expected to remain moderate in the first half of the year, amid still restrictive financial conditions and pressures on real incomes. In return, investments are expected to accelerate, supported by the significant European funds available to Romania.”
Net exports could make a largely neutral contribution to economic growth, although there is a risk of slightly negative pressures in the second half of the year if imports accelerate as investment and consumption pick up. At the same time, the negative base effect from the end of 2025 continues to weigh on the economic growth outlook in 2026.
Fiscal-budgetary consolidation, but with record allocations for investments
According to last year’s budget execution, public investments made in 2025 totaled approximately RON 137.5 billion, representing around 7.2% of GDP, „the highest level of public investments in Romania’s post-December history”, according to Prime Minister Ilie Bolojan. Of the total investments, a significant part – over 56% – came from European funds, the rest being provided from national public money.
Finance Minister Alexandru Nazare described the 2026 budget as „realistic, responsible and balanced, while built on a new record level of investments and European funds attracted by Romania.”
According to Nazare, the 2026 budget includes expenditures of over RON 100 billion for public investments, an amount that integrates funds from the PNRR, cohesion funds and other European mechanisms. He explained:
„In addition to these amounts from the PNRR, we forecast EUR 5 billion in expenditure by ministries for cohesion funds, to which is added another EUR 5 billion in European funds for agriculture. We are talking about approximately EUR 20 billion in investments, over RON 100 billion from the 2026 budget,” the minister stated. This estimate includes investments supported by the National Recovery and Resilience Plan (PNRR) – with allocations of over EUR 10.7 billion (approximately RON 52.7 billion) – plus contributions from cohesion and agriculture funds. Nazare highlighted the role of investment-oriented spending as the main driver of economic growth and the reduction of infrastructure gaps at the national level.
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