Despite the annual advance of GDP being kept at 0.3% in the first quarter of 2025, the National Institute of Statistics (NIS) made extensive corrections on data referring to the sources of this economic growth –mainly reflecting a sharp moderation of consumption.
Consequently, the contribution of the ‘trade, transport and hospitality’ sectors to the GDP advance was revised to -0.2% in the provisional data (2) published on Thursday, compared to 0% in the provisional data (1) published at the beginning of last month.
At the same time, the contribution of consumption was reduced five times, from 2.5% in provisional data (1) to only 0.5% in provisional data (2).
„The estimated gross domestic product for the first quarter of 2025 was RON 375,773.6 million at current prices, up 0.3% in real terms compared to the first quarter of 2024”, according to the NIS.
As shown in the graph below, based on the methodology of resource categories, the contribution of the gross added value produced by the main economic branches was revised downwards, from 0% to -0.3% resulting from the revision of trade, transport, hospitality sectors, but also of entertainment activities.
The ‘product net tax’ category offset the contribution, with positive contribution doubling in the new NIS data.
Consumption was drastically reduced, considering the alternative methodology of categories of uses.
Moreover, the negative contribution of net export underwent extensive corrections: from -4.1% to -2.8%.
The positive contribution of inventories and investments (gross fixed capital formation) to the GDP advance were revised upwards:
„The seasonally adjusted series of the quarterly gross domestic product has not changed substantially in real terms, the revision of the estimates for the first quarter of 2025 compared to the provisional version 1, published in the Press Release No. 138 of June 6, 2025 registering positive differences in nominal terms”, according to the NIS.
Growth prospects for 2025, shrunk by fiscal package
Economists warned that this year’s GDP advance could be affected by a potential decrease in consumption, due to the advance of inflation as a result of energy market liberalization and fiscal measures aimed at correcting the budget deficit (increase in VAT, excise duties, reduction of allowances, scholarships, etc.).
‘If the economy registers quarterly stagnation for the rest of the year, annual growth could fall to just 0.3% in 2025 – a scenario that now looks more plausible than our consensus forecast of 0.8%. Given the current trajectory, the risk of the economy slipping into a mild recession or even registering an annual contraction cannot be completely ruled out,’ ING analysts warned.
Despite these risks, most forecasts indicate an advance of around 1% of GDP for the time being, higher than in 2024, when the economy recorded a growth of only 0.8% of GDP. ‘The burden of the fiscal adjustment is distributed among several sectors, and we believe that the proposed measures will not be recessionary, although they are likely to temper consumption and investment.(…) We currently estimate economic growth of only 1% in 2025 and 1.8% in 2026, one of the lowest rates in the Central and Eastern European (CEE) region. However, public sector reforms and the correction of imbalances could create the conditions for a more solid economic increase starting 2027,’ UniCredit Bank economists noted in a recent report.
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