AOAR Forecasts for Romania’s Economy in 2026: What Comes after

In 2026, Romania’s economy will not have to choose between good and bad, but between a certain bad and a difficult path, the only one that can maintain stability and avoid a crisis of confidence. From the perspective of the Romanian Businessmen’s association (AOAR), the big question is not whether we will pay the price of adjustment, but how we divide this bill between the state, the private sector and society.   How do we ensure that in 2026 the burden is not transferred again to the population (primarily through inflation) and to the business environment?   1. Where We Stand after 2025: a Harsh but Incomplete Correction 2025 was the year when fiscal adjustment was carried out in a simple and brutal way:• more taxes,• increased pressure on the private sector,• rules changed on the fly. State reform was once again postponed. Waste largely remained tolerated, and administrative inefficiency stayed almost intact. This is not fiscal discipline, but merely a transfer of the burden from the state to those who create value. Some key benchmarks:• The budget deficit remained the highest in the EU: 9.3% of GDP in 2024, with a target of 8.4% in 2025, following successive tax hikes.• Without adjustments, the deficit would have stayed close to 9% in 2025 as well, pushing public debt onto a clearly unsustainable path.• The 2025–2026 consolidation package included a 2 percentage point VaT increase, higher excise duties, and a freeze on public sector wages and pensions until 2026. In short: we taxed those who produce more, while avoiding serious reform of how the state spends. 2. 2026: Modest Economic Growth, Largely Driven from Outside International forecasts for 2026 point to modest but positive economic growth:• European Commission: +1.1% real GDP growth in 2026 (after only +0.7% in 2025), amid fiscal consolidation weighing on public and private consumption.• IMF: +1.4% in 2026, with investments financed by European programs (NextGenerationEU/RRP) partially offsetting weaker consumption.• OECD: confirms the same picture—modest growth in 2025–2026, driven by investments and exports, not domestic consumption. at the same time, the budget deficit is estimated to decline only toward 6.2–6.3% of GDP in 2026—still well above the 3% threshold and the targets agreed with European partners. The message of the figures is clear: in 2026 we will not be in recession, but neither will we see robust growth. The economy will move forward, but with the handbrake pulled by fiscal imbalances and a heavier tax burden. 3. The Core Conflict: Who adjusts—Those Who Produce or Those Who Spend? If we do not adjust the budget, we risk a fiscal crisis. If we adjust it only through taxes, social tolerance and corporate competitiveness become uncertain.The real choice is not whether to adjust or not, but between:• a certain evil—perpetuating a high deficit combined with successive tax hikes on labor and capital, eroding the productive base;• a difficult path—state reform, waste reduction, and a rebalancing of spending, which involves political costs and courage. Tax collection is only part of a broader process of balancing between: the state’s real budgetary needs (defense, infrastructure, education, healthcare); the real economic capacity of society, especially the private sector. In 2025, the adjustment was carried out almost exclusively at the expense of producers: the minimum turnover tax (IMCa), higher taxes on labor and capital, and fiscal unpredictability. Business organizations have already highlighted the negative impact of IMCa on investments and competitiveness and have strongly called for its elimination. The key question for 2026 is uncomfortable but essential: how long can an economy grow when only those who produce are “adjusted,” while those who spend remain largely protected? 4. What We See for 2026: Three Possible Scenarios From aOaR’s perspective, 2026 may take one of the following forms: The “superficial balance” scenario (most likely)• GDP: growth around 1–1.5%;• Deficit: slow decline toward 6–6.5% of GDP;• Inflation: still above a comfortable level for businesses, but lower than in 2024–2025;• Investments: momentum mainly from EU funds and already committed public projects;• Private sector: cautious investment, focus on efficiency and restructuring rather than expansion. This scenario assumes no new self-inflicted political crisis and the maintenance of minimally functional dialogue with the business community. any major political slippage (government collapse, prolonged parliamentary deadlock) could push the economy below these projections. The positive scenario: “the hard but right path”Its premises include:• The government finally begins to adjust spending:o restructuring the public administration,o conducting a real audit of spending programs,o prioritizing investments with economic impact;• a clear timeline for tax simplification, including the elimination or reform of the minimum turnover tax;• Greater fiscal predictability, with changes announced and discussed in advance;• Gradual exchange rate adjustments in line with trade balance developments. The result:• greater confidence from the business community,• a revival of private investment,• economic growth exceeding 1.5–2% as early as 2026, based on a healthier mix of consumption, investment, and exports. The negative scenario: “fiscal fatigue”If adjustment continues along the same lines as in 2025—more taxes, more improvisation, further postponement of state reform—we risk:• economic growth below 1% or real stagnation;• a larger share of the economy moving into the gray or black market;• postponed investments and activity relocation to more predictable jurisdictions;• strained relations with European partners due to delays in deficit correction. 5. The Role of Geopolitics: a Secondary but Real Risk In 2025, geopolitical developments did not produce dramatic shocks for the Romanian economy—the regional context was difficult but manageable. In 2026, however:• a potential escalation of tensions in the eastern neighborhood,• volatility in energy prices,• reconfiguration of EU supply chainscould add further pressure to an already strained budget and to the competitiveness of Romanian companies. at the same time, EU-level stability and a more predictable ECB monetary policy provide a relatively favorable macroeconomic backdrop for investments, including in Romania. 6. AOAR’s Message for 2026 From the perspective of the Romanian Business People’s association (aOaR), 2026 will be a test of political and administrative maturity: Fiscal consolidation cannot remain solely on the shoulders of those who produce. adjustment must include the state itself: waste reduction, public sector restructuring, and investment prioritization. Budget revenue growth should rely on measures (including legislative ones) that reduce massive gaps in VAT collection (30% of collectible VAT), corporate tax (35%), and undeclared labor. Predictability must once again become the main currency of trust. Without stable rules and genuine consultation, investments will slow down, regardless of how attractive EU funds may be. Genuine dialogue with the business community is part of the solution, not a PR exercise. Fiscal and budgetary policies must be built together with those who directly bear their effects—entrepreneurs, investors, and employers.   In 2026, we will continue to choose between a certain evil and a difficult path. The Romanian business community is ready to support the difficult path—reform, discipline, efficiency—on one condition: that the bill is shared fairly between those who produce and those who spend.