Erste Group revises downward forecast on Romania's 2025 economic growth to 1.3%
<p>Because of the slower-than-anticipated GDP growth in Q1 (+0.3% y/y) and also accounting for high-frequency data signals for the second quarter, Erste Group has revised its full-year GDP growth forecast for this year to 1.3% from 1.8%. This is close to the government's 1.4% revised forecast issued in May.&nbsp;</p>

<p>Due to the much-anticipated fiscal consolidation measures, which will likely be implemented later this year, consumption is expected to decelerate further in 2025. Investments will be a key driver for this year's growth story and will be very important to follow the EU Funds absorption.&nbsp;</p>

<p>The strong negative effect from net exports should be less severe this year, either due to improved external demand or base effects combined with weaker domestic consumption.&nbsp;</p>

<p>There are also expectations for a better agricultural year which might boost the economic growth, the effects of this will only be seen in the third quarter.&nbsp;</p>

<p>Erste Group "keeps for now" its GDP growth forecast for 2026 at +3.1%&nbsp;"pending more fiscal clarity" and noting risks to the downside for this figure as well, the financial group's research note reads.</p>

<p>The government's CNP is more cautious, with a 2.4% growth forecast for 2026.</p>

<p><em>iulian@romania-insider.com</em></p>

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