According to the rating agency, despite the slowdown in economic growth and the impact of the war in the Middle East on fuel prices, the government coalition in Bucharest will make progress in implementing planned fiscal measures that will reduce the overall budget deficit to 5.5% of GDP in 2027 from 9.4% of GDP in 2024, Hotnews.ro noted.
“Although the parties in the ruling coalition disagree on some specific measures, the toughest fiscal measures, including a value-added tax (VAT) hike and a freeze on public sector pensions and wages, have already taken effect. We now expect Romania’s economy to face near stagnation in 2026, as fiscal consolidation, declining real wages and rising energy prices put pressure on private consumption,” the publication quoted the S&P report as saying.
The document states that the realization risks associated with the consolidation of Romania’s public finances will remain high in the coming years.
“Romania’s four-party coalition government continues to take measures to consolidate a large budget deficit – through tax increases and wage and pension freezes,” the S&P Global Ratings report said. The overall budget deficit is expected to fall to 6.5% of GDP in 2026 and 5.5% in 2027, down from 7.7% of GDP in 2025.
The rating agency forecasts Romania’s economy to grow by just 0.25% this year and by an average of 2.5% between 2027 and 2029, as weak consumption is only partially offset by EU inflows, which will peak at around 3% of GDP in 2026.
