IMF Forecasts GDP Contraction for Romania Amid Rising Inflation

The International Monetary Fund has revised its 2026 economic forecast for Romania downward, projecting a GDP contraction of 0.5%. This marks a significant shift from previous projections of 0.7% growth in April and 1.4% growth the prior October. Romania and Ireland are the only European countries in both advanced and emerging categories expected to record a GDP decline this year. The World Bank independently forecast the same 0.5% contraction, citing fiscal consolidation and higher energy costs as primary drivers.

Concurrent with the growth slump, Romania is facing rising price pressures. The National Institute of Statistics and Geography reported that the annual inflation rate rose to 6.61% in September 2026, up from 6.17% in August. This increase was fueled by an 11.12% rise in services prices and a 7.06% increase in non-food goods.

These trends have prompted multiple institutions to raise their inflation expectations. The National Bank of Romania revised its year-end 2026 inflation forecast upward to 6.1% from 5.5%, while the IMF raised its 2026 expectation to 8.2%. Additionally, Erste Group increased its year-end annual inflation forecast for the country from 6.4% to 7.0%. The IMF also expects Romania's unemployment rate to rise to 6.5% in 2026, though it projects a growth rebound to 2.2% by 2027.