Romania Inflation Drops as Economic Stagnation Forecasts Persist

The National Institute of Statistics reported on July 13 that Romania's annual inflation rate decreased to 10.42% in June 2026, down from 10.85% in May. The decline was driven by varying sector price increases, with services rising by 13.67%, non-food goods by 12.29%, and food goods by 5.75%. The inflation rate since the beginning of the year stood at 3.8%.

Despite the slight dip in monthly inflation, the National Bank of Romania revised its inflation forecast for the end of 2026 upward to 5.5%, from a previous projection of 3.9%. The central bank expects a further decrease to 2.9% by the end of 2027.

Economic outlooks remain cautious as UniCredit projects Romania's economy will remain stagnant in 2026, with GDP growth of only 0.2% due to fiscal consolidation. UniCredit forecasts a recovery in 2027 with growth accelerating to 2.3% as the government narrows the general government deficit to 5.1% of GDP. The bank expects the National Bank of Romania to maintain a restrictive monetary policy and delay interest rate cuts until the second half of 2027.

Potential risks include political shifts toward populist or anti-European Union governments, which could undermine fiscal adjustments while Romania remains under the European Union's Excessive Deficit Procedure.