FinMin Nazare: EC confirms Government measures are working, Romania is on the right track

The European Commission has validated the Government's recent policy measures, and Romania is entering a more predictable phase of development, underpinned by stronger investment and a stabilising economy, Finance Minister Alexandru Nazare said on Tuesday."Investment is rising and becoming the main driver of the economy, according to the latest EC report. While GDP growth is projected at 0.7% in 2025, investment is expected to accelerate in 2026-2027, supported by European funds and ongoing projects. The budget deficit is also set to narrow: from 9.3% of GDP in 2024 to 8.4% in 2025, with the Commission forecasting 6.2% in 2026. This is an important signal that confirms the effectiveness of the fiscal consolidation measures," Nazare wrote in a post on his Facebook page.He underlined that the labour market remains stable, according to European Commission estimates, with the unemployment rate returning to around 5.6% by 2027 as the economy strengthens.Nazare also argues that inflation is gradually easing, noting that after the pressures of 2024-2025, the EC forecast shows a decline to below 6% from 2026, "which will support consumption and public confidence"."The substantive changes in the way we manage public finances send, once again, important signals to our international partners. Romania is on the right track," the Finance minister also wrote on his social media page.The European Commission has lowered its forecast for Romania's economic growth this year to 0.7%, from 1.4% in the spring, and warned that the government deficit will remain high, at 8.4% of GDP in 2025 and 6.2% of GDP in 2026, according to the autumn economic outlook published on Monday by the EU executive.The current account deficit is also expected to fall to 7.9% of GDP in 2025 and 6.4% of GDP in 2026."Romania's real GDP growth is expected to remain low at 0.7% in 2025 and 1.1% in 2026, as the necessary fiscal consolidation dampens private and public consumption, in turn further affected by a surge in inflation. Still, the economy continues growing thanks to a gradual recovery in private investment, an acceleration of RRP-funded spending and a sizeable improvement in net exports. In 2027, real GDP growth is set to accelerate above 2% as the pace of fiscal consolidation eases," the European Commission notes.The labour market is also set to cool down, while the slowdown in import-heavy private consumption in combination with resilient exports should gradually reduce the large external deficit. The general government deficit of 9.3% of GDP in 2024 is projected to decline to 8.4% of GDP in 2025 and 6.2% of GDP in 2026 due to several fiscal adjustment packages.The EC's forecasts show that this year GDP growth will slow to 0.7%, after an advance of 0.9% in 2024.